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Non Domicile Tax Q&A
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Non Domicile Tax Consultancy Questions
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Using offshore company, transfer of assets abroad and UK corporation tax - USERNAME: lhuggybear
Tax Question: 1) TRANSFER OF ASSET ABROAD RISK. I am setting up, or rather I am a partner in the setup of a management company in Luxembourg. There is no doubt possible about materiality there and so there is no need to analyse the business there. I am given 49% of the shares of that company. On setup, I subscribe to these shares through a Malta company set up for this purpose. Hence the shares have never been in my hands or in my name. Is there any risk the Revenue could see a transfer of asset abroad event here or anything similar. I am UK long term resident, non-domiciled. 2) CONTROL ISSUE IN MALTA COMPANY The sole purpose of above company is to hold the above mentioned shares and as such, there will be no other income than the dividends from Luxembourg. Whether I am a director or not, there is a risk the Revenue will consider that company to be managed and controlled from the UK, as I am the founder, sole shareholder and director of the company. I may have board meetings by myself in Turkey, but that may still not change the fact that it could be seen as managed from the UK, as I live here. Now, the dividend income stream into Malta, which is not taxable there, because of its intra-European 10%+ holding rule, would also not be taxable in the UK. Is there hence any concern for me to have? It is clear that I intend to bring back dividend into the UK, and pay tax on that, but also if the amounts are material, use the remittance mechanism to exempt part of my dividends. Thank you.... . . .
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Remittance derived from untaxed foreign income USERNAME:Pueblo
Tax Question: The situation concerns a non dom who pays tax on an arising basis. He has an offshore account with untaxed income. He invests in a portfolio of funds in the current tax year, pays all taxes that are due. Can he remit that income (where tax has been paid) into the UK without any tax liability? . . .
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Additions to NZ trust to avoid IHT? USERNAME:arob
Tax Question: I hold a NZ family trust and am considering purchasing a property in the UK. This was established when I was not domiciled in the UK but I am now domiciled here. I understand that UK property will therefore not meet excluded property status and therefore be liable to IHT (unlike NZ property). It has been suggested that I hold any UK property in a NZ overseas company to maintain excluded property status and legally avoid IHT. Would this overseas company need to be in place prior to any purchase of UK assets by the NZ trust or could the NZ trust purchase UK assets as it currently stands and then be restructured in NZ without incurring UK IHT liability as a result of the temporary holding of the UK property in the NZ trust? . . .
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Tax treatment of pension income for former US resident
Tax Question: As a expatriate of the UK but have lived in the US for the past 40 odd years and derive my income from SSA and a company retirement. If I should return to live in England for my retirement years, would I have to pay taxes to UK as well as USA. My income is minimal and so is my savings. I am 72 years of age. . . .
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UK property owned by offshore company and UK tax on transfer
Tax Question: I am a non-dom non-resident in full-time employment overseas for the last 30 years. I have recently bought a UK property with an offshore company to avoid future IHT. I am the sole shareholder of the offshore company but not the director (the director lives in the ME). My question is : is it possible for me to gift the shares in the offshore company to my non-domiciled adult children and UK-domiciled wife (who is likely to use the house as her main residence) ? and if so what are the implications of this gift tax-wise for all of us ? e.g stamp duty on the transfer of the shares to them; current or future capital gains ? IHT ? and could my wife claim in future (as owner of 30 or 40 or 50 percent owner of the company shares ) the UK-company owned house as her main residence ? what are the implications for me if I retained a shareholding in the company but UK-willed my share to my wife.What are the tax implications for the adult children on their shares gift ? Thank you . . .
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UK and Greek tax
Tax Question: I am a permanent resident of Greece for 20 years,UK citizen and (until now) presumed UK domicile, age 68. UK visits 4-5 weeks a year. UK pension 25K, Greek income 400K. No retirement plan. Half owner with my (greek) wife of a 300K property in London used as residence by stepson. Prospective half owner with my own son of a 400K property in London (which he will use except for our occasional visits). I plan a transfer of title to my wife for the first property. I would wish to change domicile to Greece where 2 other properties are (jointly with my wife) owned, total value 700K euro. I obviously need advice re wills (at present only in UK) and inheritance tax in both countries. Can you help? My questions in particular are: 1. Can I change domicile officially before I die! Some advisers have suggested not. 2. If one of my children remits the cost of buying a property from a greek joint account (him and me) to his own UK account, is there any problem? 3. If a property is bought with funds from a UK joint account and a trust deed immediately allocates the ownership of the property 95%/5% is there any problem? I look forward to your comments. . . .
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Non Dom/overseas tax questions
Tax Questions: 1. Can a Uk ltd co buy a property in Italy for use of director when working from there? 2. After the 7 year of non dom if I decide to be taxed on the arising base how does it work as far as IHT concerns for all the estate oversea? Thks . . .
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Using offshore company for affiliate business
Tax Question: Hello, I'd like to set up an offshore company for my affiliate business to save tax. I'm a Hungarian national (non-domicile) and I have lived in the UK since 2006 (therefore I'm a UK resident). I still have a full-time job and I'd like to keep it until my affiliate business reaches the required level. Is it possible you think to avoid paying tax in the UK for my affiliate business by setting up an offshore company? My earnings from the affiliate business is generated in the US. Thanks . . .
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Withholding tax on interest paid
Tax Question: An individual UK resident non domiciled has just bought a property in London on his name with an offshore mortage arranged by Barclays IOM. Among the documents that Barclays asked to sign there was a letter of authority requesting permission by Barclays to approach the Inland Revenue in order to get a dispensation to avoid to withhold tax on interest paid on the mortgage. Should the individual receive a confirmation that this dispensation has been granted or it is actually automatically granted when the application is submitted to the Inland Revenue? The mortgage is paid by the individual through his bank account held off-shore as well. I believe that there must be a common procedure to avoid any problem for the individual who takes out a facility with Barclays offshore compared to the one who get the same facility with Barclays in London. Could you put some lights on this issue? Many thanks indeed . . .
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UK tax on Indian property
Tax Question: Hi there, My family and I are currently UK Resident, but are Domiciled in India. We are currently taxed on an arising basis. My parents own a property in India - this property is jointly held through a SPV, and is rented out. We currently receive rent upon which we have paid Indian taxes (which is approx 30%). We would now like to remit this money to the UK, but are unclear as to the terms of the UK-India Double Taxation Treaty - would any further taxes be payable? Furthermore, if we sell the property in India, what would the CGT implications be (liable in India or UK) - and can we defer this using Roll-over Relief (say by investing the proceeds in an EIS). If you have any guide that clarifies the nature of this specific tax treaty, I would very much like to read it. I am sure that such a guide would appeal to the other members of this site. Thank you for your time. . . .
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Non dom tax on gift to Brother
Tax Question: Gift by a UK Resident Non Dom A is a Uk resident non dom claiming the remittance basis. She wishes to make a gift of PDS 5,000 to her UK resident and UK domiciled brother out of her overseas interest income. Are there any tax consequences of this? Secondly, if she makes a gift to a NON UK resident brother but into his UK bank account, are there any tax consequences. Thank you. . . .
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Sundry non dom tax questions
Tax Question: Dear Sirs, Mr. Joe, a Non Domicile UK resident, has being paying the 30K remittance charge on his overseas income and gain (Some capital gain and some interest.) He also owns a second property abroad which is for his own use when he visits and it has never been rented out. He owns shares of a trading company and does not draw any salary. His wife Mrs Joe, with the same tax status until 09-10, left abroad on employment in 10-11. He also has a sister Jane who is a Non UK Resident and a brother John who is a Non Domicile UK resident and his sister in law Mrs John who is a Domiciled UK resident. Questions: Please advise if any tax charge would arise for Mr and Mrs Joe and Mr and Mrs John for the following examples. 1) Mr. Joe gifts or loans (which would work better?) his entire overseas mixed fund to Mrs Joe. Mrs Joe, on her return, brings the income from these funds into the UK. 2) Mr Joe gifts some amount to John in John's overseas current bank account, and the interest from this money goes into Johns another overseas savings account. Can John bring the money from the current account into the UK if he ensures Joe never benefits from this money? Is it correct that John would pay UK tax on this interest after getting credit for the tax paid in the overseas country? 3) Mr. Joe elects his overseas property to be his main home and immediately sells it to Jane. He brings the proceeds in the UK. Is there a procedure for electing his main home with the IRS in the UK? 4) Mr Joe, gifts Mrs John some money into her UK bank account. 5) Mr Joe's overseas funds are in US Dollars, Say $2 million. In April 2009, say the exchange rate is $1.50 to 1£ (the amts to £1.33 million approx.) In April 2010 the exchange rate is say $1.75 (this amts to £1.14 million). Would this mean a capital loss of approx £190K? Can this loss be used to offset his worldwide and UK income and gain? What if in this scenario he gets UK dividend of 50K Thank you Last year there was some mention of some US tax experts being online. Are they ready to answer questions? . . .
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Non dom remitting cash to the UK
Tax Question: Hello, I am a non-dom French national. I have been living and working as a self-employed and paying tax in the UK since 1996. I have funds of mixed origin in France (just over €100,000) for which I have never paid tax in the UK as they were never remitted to the UK. I now would like to transfer them to the UK. What are my best options, UK-tax wise? I've been a higher rate taxpayer so far, except in 2009-10 when I was in the basic rate band, but I am likely to return to the higher rate band this tax year. Many thanks for your advice. Best regards . . .
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Income tax and offshore foundation
Question: If a Panamanian Foundation owns shares in a UK Limited company, the beneficiaries are UK domicle for earnings, is income on dividends charged at a higher tax rate then if the UK beneficiary owns them directly? Many thanks . . .
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Non Dom exchange gains on foreign pension and inheritance tax
Questions I get a swiss and an italian pension and keep them in separate accounts. I have recently become UK resident but only bring part of my pension to the UK. On my tax return however I would be declaring the whole pension amount,so which exchange rate do I use? What about capital gains as the pensions are put into my accounts monthly but I bring money into the UK randomly.Needless to say ,I do not know the original exchange rate for each sum.Thanks I am a non dom UK resident and plan to buy a house in the UK.For IT purposes,would you advice me to give the legal ownership to my children and retain the beneficial interest. The children are all non dom at the moment. Also ,what would be the implications in the future if they inherit foreign property from me.Should they remain non domiciled?Their partners are UK domiciled.Thanks. . . .
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Structuring purchase of UK property to reduce tax for non dom/non resident
Question: Dear WealthProtectionReport, I am a non-resident non-dom currently based in Hong Kong. Originally from the UK but having lived in Hong Kong for the last 18 years - full-time job in HK, married to a local HK Chinese and owning property in HK. Recently we bought a property in the UK as an investment to let out. This was bought in joint names with an off-shore mortgage. We are now considering buying a plot of land in the UK to build 2 houses which when complete we can either rent out or sell. The land will be bought without any mortgage and the subsequent building costs can also be financed by us without resorting to any loans. My questions are as follows: 1. What would be the most tax advantageous way of buying the land - individual names or set-up a company (if a company should this be offshore ie a Hong Kong company or local UK company ?) what would the tax implications be ? 2. Should we arrange a mortgage for the financing of the construction or pay for this ourselves ? 3. From a tax consideration would it be better to let the properties when completed or sell outright ? We can hold the properties for a few years if need be before selling. Many thanks for your advice. . . .
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