Expat Tax Saving Guide

Have you heard the one about the British peer who claims to be non-domiciled in the UK?  Not ‘non-resident for tax purposes,’ but apparently ‘not domiciled in the UK?’  We’re talking about Lord Ashcroft, the deputy chairman of Britain’s conservative party who also has a seat in the influential House of Lords – yet who apparently doesn’t have to pay UK tax on his alleged billions of offshore pounds.  Wow, what a story!

In fact, it’s a story that must make Robert Gaines-Cooper weep.  Mr. Gaines-Cooper recently lost his appeal against the HMRC ruling that he was UK domiciled because of the extent of his personal ties with Great Britain, and therefore he was subject to UK tax on his worldwide assets and income.  Yet Mr. Gaines-Cooper certainly didn’t live in the UK, have a seat in the House of Lords nor hold a peerage, seemingly wholly unlike Lord Ashcroft.  But then again, Mr. Gaines-Cooper wasn’t a huge donor for the conservative party – or the labour party, or any other political party for that matter.  So, that was probably where he went wrong and why he lost his case…

Indeed, it seems you can be proud to be a British peer like Lord Ashcroft and Lord Paul, (another peer allegedly up to the same tax avoidance ‘tricks,’ but this time a labour supporter) – but you can’t make these over privileged people pay tax like the rest of us because they can bend, flaut and even invent the rules to suit themselves.  Does it make you proud to be British and happy to remain in the UK, pouring more and more of your income in the form of tax into the void that is the budget deficit, when you know there are others out there who have massive influence over the direction of this country but who refuse to contribute fairly to it in the form of tax?

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The failure of the appeal of Robert Gaines-Cooper in his case against the British taxman, as he fought to prove he was non-resident in the UK and therefore not liable to UK income tax on his many millions, has made headlines – and created some confusion.

A lead article in the Money section of this week’s Sunday Times for example would have us all believe that HMRC has got it in for all expats, and that we’re headed the same way as America where Americans are basically ‘owned’ by the IRS even if they emigrate to live on the moon!

It’s a case of here we go again, apparently and allegedly the British government is going to launch a tax crackdown on expats who’re resident abroad and claiming non-residency and not-ordinary resident status in the UK to ‘legitimately avoid’ tax.  But in all honesty, nothing has changed…here we explain the rules and why the Robert Gaines-Cooper case allegedly and apparently flauted them.

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There is a well known saying that: “time and tide wait for no man” – and as we have entered 2010 already, the 6th of April is fast approaching, meaning that we’re about to see the introduction of a 50% tax rate and are now only weeks away from the UK moving back into the realms of being a very high tax country.

There has been much discussion in the media about how the full impact of this tax increase can be averted, with some individuals, companies and even business sectors putting active plans in place to leave the UK altogether. 

However, we thought we’d ask an expert whether you can avoid the UK income tax rate increase without having to move abroad…because whilst we appreciate that those who can actually will relocate, we’re well aware that not everyone is in a position to emigrate.

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