Non Resident - Self employment Tax NI

[aspired]

Hello, I have a few question about my situation that have been bugging me...

I was continuously employed in the UK until I left in Jan 2007, I initially intended to have a year off and return to the UK but have been in Thailand ever since.

My employment record here is quite patchy I was working freelance July/August 2007 and was an employee from Nov 2007 - April 2008 and again Oct 2010 - Feb 2011. In between I have done some small scale selling on eBay but in the last year or so I have put some extra effort into this. I know how much profit I have made each month, but don't have detailed records like invoices,receipts etc. The eBay account is in the name of my wife (A Thai national) and registered in Thailand, payments from buyers come in to a paypal account registered in my name in the UK. Its a bit complicated because ebay and paypal fees are in GBP, we buy goods in THB and sell in GBP and a little in US$, we are not looking at much in the way of profits average 200GBP per month.

I still have a property in the UK which was my home, it has been rented out since leaving the UK and I am registered as a non resident landlord. I still receive UK tax returns annually which are addressed to my parents address, I complete them every year online. There is not a lot of profit after all the agent fees and mortgage Interest has been paid, in this tax year the profit was around 1,500GBP, last year only a few hundred because there were some big repair bills.

My UK state pension has 19 years of contributions I also have a small private pension (<15,000GBP), I have paid nothing to either pension since leavng the UK. The pension service know I am in Thailand as I had a projection sent here a few years ago.

I stay in Thailand on a category O - Non Immigrant Visa based on marriage, every 90 days I have to cross the border and leave Thailand turn around and come back in for another 90 days. I am 40 years old.

1) I will sell the propery at some time in the future, will I be liable to capital gains tax? (I think not if this was my home?)

2) Should/can I register as self employed in the UK, I can't show a lot of official paperwork but can say what profit I have made. Should I do it now or next year, is it a problem that I've not registered before now?

3) Should I change my address to show I am in Thailand on my self assesment?

3) If I can register as self employed would I be able to make the cheaper class 2 NI contributions to top up my pension?

Thanks for any advice.

[etf]

Hi aspired,

You will need to determine whether you can claim to be regarded as not resident and not ordinarily resident for UK tax purposes from the day following your original departure from the UK. Have you claimed non-UK resident status on the tax returns you have submitted to HMRC from the point in time that you left the UK?/how many days have you spent in the UK since January 2007?/have you performed any work in the UK since you left?

Once your UK resident status has been established, it will be easier to comment on any requirement to pay UK income tax and UK capital gains tax.

If the eBay work is undertaken in Thailand, it is recommended that you establish any reporting obligations that arise locally. A starting point will be to access PWC's guide for expatriates working in Thailand which you can access through the 'useful links' section of the website below.

It may be possible for you to pay voluntary class 2 NICs even if there is no requirement for you to register as self employed in the UK-take a look at booklet NI38. Class 2 NICs are cheaper than class 3 and perversely they offer a wider range of benefits.

Kind Regards

etf

www.theexpatriatetaxfactory.com

[aspired]

Thanks for your response & sorry for slow reply,

Have you claimed non-UK resident status on the tax returns you have submitted to HMRC from the point in time that you left the UK?
No the address on the return is that of my parents in the UK, although I am registered as a non-resident landlord,

/how many days have you spent in the UK since January 2007?
None.

/have you performed any work in the UK since you left?
No.

If the eBay work is undertaken in Thailand, it is recommended that you establish any reporting obligations that arise locally.
Yes I understand, the account is registered in my Thai wifes name. I would not meet the requirements for a work permit to do this officially (need to form a company and employ 4 Thai workers and also would not meet minimum salary requirements for a foreign worker ??)

It may be possible for you to pay voluntary class 2 NICs even if there is no requirement for you to register as self employed in the UK-take a look at booklet

NI38. Class 2 NICs are cheaper than class 3 and perversely they offer a wider range of benefits.
This part interests me the most, I had a forecast in June 2009 and they offered I could buy more years at class 3 rate 7.80 & 8.10 pw.

Thank you.

[nikkisizer]

Have you claimed non-UK resident status on the tax returns you have submitted to HMRC from the point in time that you left the UK?
No the address on the return is that of my parents in the UK, although I am registered as a non-resident landlord,

/how many days have you spent in the UK since January 2007?
None.

/have you performed any work in the UK since you left?
No.

Hello aspired,

Based on the above information you would be classed as not resident and not ordinarily resident for UK tax purposes.

Your self employment income would not be subject to UK tax so you do not need to register as self employed but you should have/should be completing the residency schedule to submit with your annual UK tax return.

You should also inform HMRC of your address in Thailand and explain that it is your permanent residence but you can keep the UK address as your correspondence address if you wish.

With regards to the disposal of your property, as long as you remain not resident and not ordinarily resident for UK tax purposes your property in the UK will not be subject to capital gains tax.

Happy to help if required so if you need any further assistance please do not hesitate to contact me.