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Where Taxpayers and Advisers Meet

Non-residence

Charlie
Posts:58
Joined:Wed Aug 06, 2008 2:18 pm

Postby Charlie » Fri May 02, 2003 10:46 am

I am a UK resident and I have lived and worked in the UK all my working life (about 40 years). I am shortly to retire abroad. What is the minimum period that I, as a retiree to a country that has a double taxation agreement with the UK, would have to remain in that country as a UK non-resident if I am to avoid losing my non-resident tax status retrospectively on my return to the UK to become a UK resident again. I had always understood that the minimum period is one complete tax year. But the Inland Revenue's IR20 and form P85 seem to suggest a minimum of 3 and 4 years respectively. Which is correct – 1, 3 or 4 years?

DF
Posts:35
Joined:Wed Aug 06, 2008 3:02 pm

Postby DF » Wed May 07, 2003 8:17 am

Charlie

If you become resident in another country that has a DTT with the UK then it would be possible to claim non residence in the UK by virtue of the DTT, even although under UK law you would be regarded as a resident.

If you are intending to return to the UK (as you seem to indicate) then the questions is what benefits are you trying to achieve by becoming non resident whilst abroad? For example, are you trying to avoid an income tax or capital gains tax charge?

Let me know

David

Charlie
Posts:58
Joined:Wed Aug 06, 2008 2:18 pm

Postby Charlie » Wed May 07, 2003 10:54 am

David

Yes, the country in question is Cyprus where retired ex-patriates pay only 5% tax on remitted income which is free of UK tax providing one becomes a UK non-resident (maximum 90 days in the UK etc etc). What I am not clear about is this: how many years minimum do I have to be a UK non-resident if I eventually decide to return to the UK as a resident again but not become liable retrospectively for income tax on my pension paid gross to me in Cyprus during my UK non-resident years?

Michael


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