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Where Taxpayers and Advisers Meet

Fiscal nomad hmrc investigation

Bunat15
Posts: 3
Joined: Wed Aug 17, 2016 4:11 pm

Fiscal nomad hmrc investigation

Postby Bunat15 » Wed Aug 17, 2016 4:42 pm

Hi

Tax investigation year 2012/13.

I lived in Portugal, British citizen, was non resident Uk, but also non tax resident in Portugal due not spending 183 days of the year there. At the time I was advised in Portugal that I did not meet the criteria to be tax resident.

Had a job in which I travelled extensively, paid tax on the uk part of my income and filed tax return in the Uk. I did not pay tax anywhere on the worldwide part of my income.
Re the investigation which was looking carefuly at my residence status, I sent a large pile of documents to HMRC last year in response to a series of questions, which proved beyound any reasonable doubt that the centre if my life that year was in Portugal. (rented flat, family there, full utility bills in my name and all backed up by spending patterns on bank account statements and flight tickets , only 45 midnights spent in the uk because of my job, no house, car, social ties etc there.

HMRC had incorrect information and investigation probably initiated due to them thinking that I owned a property in the Uk, which they have now accepted I dont.

Officer dealing with case apparently unwilling to close the case, although he must know that by all other criteria looked at I was non resident Uk, and is wanting me to become retrospectively tax resident in Portugal for the year concerned.

My questions are:

1. Is my tax status in Portugal even relevant in determing my uk residence status? I can not find any law, criteria mentioning this, and I note that the statutory residence test which is a highly prescriptive document does not make and mention of taking up residence elsewhere as a determining factor. Also, the uk does not have worldwide tax so I am not obliged to pay tax on worldwide earning if unable to prove that I have paid elsewhere.
2: i was a fiscal nomad. Does hmrc tend to accept this? Is fiscal nomad a legally acceptable status?
3: is there any law or legislation anywhere saying that one has to be tax resident somewhere?

I wonder if anybody could give me a definitive answer in this as I need to know exactly where I stand legally with this investigation, and would really appreciate an expert opinion.

Thanks very much.

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: Fiscal nomad hmrc investigation

Postby LozaACCS » Thu Aug 18, 2016 9:04 pm

1 I would disagree, there are numerous parts of the SRT which can be influenced or determined by the time spent outside the UK.
2/3 It is legally possible to be non resident in any country, you should realise that such a status is likely to come under scrutiny, you should have good advisers to guide you along this route

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Fiscal nomad hmrc investigation

Postby bd6759 » Thu Aug 18, 2016 9:40 pm

The SRT did not apply in 2012-13.
If you were resident before then, you need to show that you became non-resident by leaving the UK permanently, or at least in circumstances that were likely to be permanent. As a rule of thumb, you would need to have an intention to be away for 4 years.

Just because you are not resident in Portugal for more than 183 days does not mean you don't have a tax liability there.

Bunat15
Posts: 3
Joined: Wed Aug 17, 2016 4:11 pm

Re: Fiscal nomad hmrc investigation

Postby Bunat15 » Mon Aug 22, 2016 2:25 pm

Hi

Thankyou for the two replies, which prompt a couple of questions:
1: within an HMRC enquiry is an inspector within their rights/scope to insist on me retroospectively taking up tax residence elsewhere as a condition for accepting that I was non resident uk in that year?
2: could anybody recommend an tax advisor with extensive exoerience of dealing with HMRC enquiries and an excellent knowledge of the legislation in place regarding residency rules?

Best Regards

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Fiscal nomad hmrc investigation

Postby bd6759 » Mon Aug 22, 2016 6:58 pm

To be "tax resident", you will need to fall within the tax legislation of that particular country. There is no choice in the matter. You are either caught by the laws or you are not. You can be caught by the tax laws of more than one country at the same time. So being resident in one country does not excuse you from the taxation rules of another. That is why it is unlikely (or at least very strange) for HMRC to say that you will not be resident in the UK if you are resident in Portugal.

If you are resident on the UK, you are taxed on your worldwide income. If you are also resident in Portugal the provisions of the UK/Portugal double taxation treaty will apply. This will either give Portugal sole taxing rights or primary right whereby UK will give relief for any Portugese tax suffered.

Most tax advisors should be able to help you with this.

Bunat15
Posts: 3
Joined: Wed Aug 17, 2016 4:11 pm

Re: Fiscal nomad hmrc investigation

Postby Bunat15 » Sat Sep 17, 2016 8:17 pm

Thankyou bd6759 for your response.

Do you think within an enquiry that an HMRC officer has the right to ask for documents relating to my tax position in Portugal?

From your response it seems clear to me that any such documents are irrelevant in determining my tax residence status in the UK ..

Thankyou.


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