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Where Taxpayers and Advisers Meet

Do you NEED to have a Tax Residence?

cr0
Posts:30
Joined:Fri Dec 08, 2017 11:30 pm
Do you NEED to have a Tax Residence?

Postby cr0 » Wed Apr 19, 2023 10:38 pm

If someone leaves the UK and travels around as a nomad without becoming tax resident in any country would they still default back to being UK tax resident even though they are not tax resident according to the SRT?

Or would it be difficult to live like this without an official tax residence?
For example banks may ask for tax reference numbers, etc.

Thanks

bd6759
Posts:4296
Joined:Sat Feb 01, 2014 3:26 pm

Re: Do you NEED to have a Tax Residence?

Postby bd6759 » Thu Apr 20, 2023 9:17 am

No. The UK cannot unilaterally declare that every person who fails the SRT will be a UK tax resident if they don’t have another tax residence.

Being liable to tax is not normally a requirement for opening a bank account. However I don’t think a nomad would want to open a bank account in every country they visited.

darthblingbling
Posts:711
Joined:Wed Aug 02, 2017 9:09 pm

Re: Do you NEED to have a Tax Residence?

Postby darthblingbling » Thu Apr 20, 2023 7:30 pm

I should point out that not being tax resident anywhere doesn't necessarily mean you're exempt from tax, it simply means no one country will have the right to tax your worldwide income and gains. If income or gains are sourced from a particular country then it will still likely be taxable there, depending on local laws.

It can also leave you worse off on some occasions as you'll not be afforded some of the protections you may get under a tax treaty. I've seen it a couple of times where people are inadvertently not tax resident anywhere for a few months, usually after leaving the UK to a country that has no concept of splitting the year for tax residence purposes (Spain being one).

cr0
Posts:30
Joined:Fri Dec 08, 2017 11:30 pm

Re: Do you NEED to have a Tax Residence?

Postby cr0 » Thu Apr 20, 2023 9:37 pm

Thanks

Going points.

Yes, I was thinking mainly in terms of Capital Gains, and possibly online / remote work.

Thanks

Integraoutsourcing
Posts:11
Joined:Wed Apr 12, 2023 12:55 pm

Re: Do you NEED to have a Tax Residence?

Postby Integraoutsourcing » Tue Jun 13, 2023 8:08 am

In the case of the UK, tax residency is determined using the SRT. If someone meets the criteria outlined in the SRT and is considered a tax resident in the UK, they will generally be subject to UK tax on their worldwide income.

If an individual is not a tax resident in any country and does not have a tax home or a permanent place of abode, they may be considered a tax resident of the UK by default, according to the UK tax rules. This is known as the "tie-breaker" rule, which applies if an individual does not meet the requirements to be a tax resident in any other country.

Living as a nomad without a tax residence can be challenging when it comes to dealing with financial matters. Many financial institutions, including banks, often require individuals to provide a tax reference number or proof of tax residence for various purposes, such as opening bank accounts or conducting certain financial transactions.
For more info check out globalintegra.co.uk

darthblingbling
Posts:711
Joined:Wed Aug 02, 2017 9:09 pm

Re: Do you NEED to have a Tax Residence?

Postby darthblingbling » Tue Jun 13, 2023 8:19 am

Can you provide more details on this tie breaker rule you talk about as I'm keen to know how the UK can apply tax residence on someone who doesn't meet the conditions of the SRT.

cr0
Posts:30
Joined:Fri Dec 08, 2017 11:30 pm

Re: Do you NEED to have a Tax Residence?

Postby cr0 » Fri Jun 16, 2023 8:32 pm

In the case of the UK, tax residency is determined using the SRT. If someone meets the criteria outlined in the SRT and is considered a tax resident in the UK, they will generally be subject to UK tax on their worldwide income.

If an individual is not a tax resident in any country and does not have a tax home or a permanent place of abode, they may be considered a tax resident of the UK by default, according to the UK tax rules. This is known as the "tie-breaker" rule, which applies if an individual does not meet the requirements to be a tax resident in any other country.

Living as a nomad without a tax residence can be challenging when it comes to dealing with financial matters. Many financial institutions, including banks, often require individuals to provide a tax reference number or proof of tax residence for various purposes, such as opening bank accounts or conducting certain financial transactions.
For more info check out globalintegra.co.uk
Interesting.
Which tie-breaker rule is this exactly?
Not the one in a DTA between the two countries?


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