Firestyle Magazine Issue 7 - Spring 2017 | Page 15

The general rule if you become non-resident is that you’ll pay tax on your UK income but will not normally be liable to UK tax on your overseas income. So if you’re employed, you will not pay UK tax in respect of remuneration for duties performed abroad. Earnings for duties performed in the UK will remain taxable unless they’re only incidental to the over-seas duties. It’s possible that some of your income could be taxable in the UK and also taxable in the country that you have moved to. However, the worst case scenario is that you will effective-ly end up paying just the higher of the UK tax or the tax charged abroad. It is important, however, that you take local advice when moving abroad about the tax rules that will apply in the country where you will be living. If you are UK resident then you will pay UK capital gains tax (CGT) on gains from disposing of your assets wherever they are situated in the world. The tax treatment does not change if you’re only temporarily non- resident – essentially where you are away for a period of five years or less. But be warned that tax may be paya-ble in your new country of residence, and this could be higher than the CGT that would have been paid in the UK. Unlike income tax and CGT, the determining factor with inheritance tax (IHT) is your domi-cile. Your domicile is basically the country that is regarded as your natural or permanent home. You can only have one domicile, which is normally, but not always, the country of your birth. You can change your domicile, but usually with some difficulty. And even if you do manage to change your UK domicile, for IHT purposes you will be deemed to still be UK domiciled for a further three years. Even if you’re moving abroad permanently, until you are well settled in your new homeland you should consider keeping a UK bank account open and keep at least one credit card, be-cause in some countries it can be difficult to borrow before you have an established credit history there. Opening a local currency bank account in the country that you move to could be considered along with opening an offshore bank account in a well regulated offshore centre. The latter can provide tax breaks by paying interest gross, and may offer 24-hour internet banking, multi-currency facilities and mortgages. Becoming an expatriate will also provide you with access to a range of tax-efficient financial planning opportunities which should be considered in conjunc-tion with professional advice to ensure that you pay due attention to currency and taxation issues, and achieve an appropriate level of risk, diversification and flexibility. Moving abroad is a particularly complicated area where specialist help is essential. To receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, please contact Paul Brady on 0121 355 2473 or email [email protected]. 15