Non-residency conundrum!

[Maltymax]

I have recently qualified (under the 'ties' rules) as a non-resident for UK tax. I'm a self employed sole trader and I work all over the world. I own a house in the UK which my ex-wife and my children live in but I have not been resident in, nor have spent a night in since January 2015. Whenever back in the UK (indeed in all countries I work in) I rent temporary accommodation. At present I do not qualify for tax residency in any of the other countries that I work in (in that year 112 days in Austria, 107 in UK, 57 in USA and the rest spread around several other EU countries). The question is, is there any international requirement for me to be a tax resident somewhere? As at present I don't actually qualify as a tax resident in any. I am happy not to be, submitting a UK tax return on my UK income alone and paying withholding tax in all other countries but I'm concerned about the legality of it!! Many thanks for any advice...

[AmanSood]

tricky situation. Where do you consider your home and where do you plan to settle down? I would say on the basis that your centre of vital interests are in the UK, you should treat yourself as treaty resident in the UK and therefore report 100% of your income in the UK. The UK would then give a credit for any taxes paid in any of the other countries you are working in. Alternative would be to simply report the income earned whilst working in the UK on your UK tax return and pay tax on this as you would still be taxable on UK sourced income even when non-resident..

[Maltymax]

Thanks for the reply! But I don't really want to settle down anywhere. I'm actively pursuing a continuation of my non-resident status with a view to becoming permanently non-resident. However, is it legal for me to NOT be a tax resdident anywhere at all: to keep my UK citizenship, submit UK returns based only on my UK income and drift from country to country. My turnover is over £400k pa and it's is hugely beneficial for me not to be taxed on my worldwide income in a single place.

[AmanSood]

Sure it is possible to be non-resident worldwide for a short term 1/2yrs but it's unlikely for a longer term particularly if you are spending quite a bit of time as you are in the UK/Austria and continue to do so. For example, if you spend more than 90 days in the UK in the tax year and continue to do so then you would have at least 3 ties and therefore UK resident. Also a tricky position is the social security. Do you plan to pay social security in each of the countries you are working in? Also, the VAT considerations would need to be factored in...

[Maltymax]

Sure it is possible to be non-resident worldwide for a short term 1/2yrs but it's unlikely for a longer term particularly if you are spending quite a bit of time as you are in the UK/Austria and continue to do so. For example, if you spend more than 90 days in the UK in the tax year and continue to do so then you would have at least 3 ties and therefore UK resident. Also a tricky position is the social security. Do you plan to pay social security in each of the countries you are working in? Also, the VAT considerations would need to be factored in...

I currently only have one tie. The 90 day tie. No country tie as I was in Austria more than uk. No accommodation tie as not resident in the house I own. No family tie as permanently separated with a view to divorce and I see my children within the UK less than 61 days a year. That gives me 120 days a year in U.K. Which is easily sustainable. Even 90 would be fine. I pay NI in UK but no social security in EU as I am a UK resident. Withholding tax elsewhere. My accountant advises me VAT stays the same. So, if I can live with the lifestyle, it's not impossible to be a tax gypsy as it were....?

[DavidTreitel]

What visa do you have in the US? Are you filing US tax returns each year?

[jakuk]

I am fascinated by this question ,

I am trying to answer a similar question , the only difference is the subject is retired ,

Been none resident from UK for several years and now intending spending 3 Months maximum in any one country ,
this question has popped up several times with myself and a good number of other retirees,

is there a definative answer ,

all based on the fact there are no UK ties