Using Double Tax Treaties to avoid UK Tax


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home | Double Tax Treaties

Using Double Tax Treaties to avoid UK Tax

Double tax treaties are agreements between different Countries that apply to determine which Country shall tax certain forms of income and gains. The provisions though are much wider than this, and they can also be used to determine an individuals or company's tax residence.

The need for double tax treaties arises because many Countries tax both the income of their residents as well as any income arising in their borders. So a resident on one Country (France) may be taxed by France on his worldwide income.

However if some of his income arose in the UK, the UK may also want to tax the income arising within the UK. This could lead to the same income (ie the UK income) being taxed twice. This is where double tax treaties come into play, and they could provide for either an exemption from tax in one of the Country's or a tax credit to offset against the other Country's tax liability.

This section include articles that cover the use of double tax treaties.

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Articles on Double Tax Treaties

Will you be subject to UK national insurance contributions when working abroad?
21/05/2008

If you've been posted abroad as well as assessing whether you'll be subject to UK income tax, you'll need to consider whether you'll subject to UK national insurance on your salary. This will primarily depend on the status of the country where you'll be working. This article looks at the different options available. . . . keep reading

Where is your pension taxed?
30/04/2008

If you're receiving a pension from overseas it's important to be able to establish in which country it is taxed. As a UK resident you are usually taxed on your worldwide income, which would include a pension from overseas. However the terms of double tax treaties can significantly impact on this. This article shows you how to determine in which country your pension will be taxed wherever it is paid. . . . keep reading

Using a UK company in offshore tax planning
18/04/2008

Non UK residents looking to structure investments both in the UK and overseas may look to use a UK limited company as an intermediary for their overseas investments. This article looks at when and how using a UK company could be effective in reducing taxes on investments. . . . keep reading

Share options and double tax treaties
17/03/2008

If you hold share options as a non UK resident assessing the impact of the provisions of a double tax treaty on your UK tax charge is essential. This article looks at how double tax treaties will effect any UK tax liability. . . . keep reading

Offshore trusts for grandchildren to avoid UK income tax and CGT
05/03/2008

The opportunities for UK residents to successfully use offshore trusts to avoid UK tax have been significantly reduced over the past few years due to the scope of the anti avoidance rules in place. This article looks at how offshore trusts for grandchildren can still be used tax efficiently by UK residents. . . . keep reading

How UK residents can use a Singapore company to avoid capital gains tax
27/02/2008

Using overseas companies to avoid UK capital gains tax is an established form of tax planning. Unfortunately if you wanted to use this technique to avoid CGT nowadays it's subject to numerous anti avoidance provisions. This article looks at one way to circumvent the anti avoidance rules. . . . keep reading

Do you need to establish residence overseas when you leave the UK?
11/12/2007

When you leave the UK it's important to be able to show that there is a clear intention to establish a home overseas. Many people ask whether it is essential that a tax residence overseas is established in order to obtain non UK residence status. This article looks at the advantages & disadvantages of establishing an overseas residence. . . . keep reading

A step by step guide to completing the 06/07 non residence pages of the tax return when you leave the UK
21/11/2007

If you're leaving or planning to leave the UK our plain english report on completing the non residence pages is essential reading. It shows you the best way to complete the non residence supplementary pages of the tax return and the reasons for the information required. . . . keep reading

Offshore tax article - How a UK company can escape UK tax by using double tax treaties.

The standard rule is that a company formed in the UK is UK resident for tax purposes. This means it's taxed in the UK on its worldwide income and gains. If you can get a company classed as non resident this can be very advantageous. This article looks at how double tax treaties can be used to transfer a company's residence overseas and reduce UK taxes. . . . keep reading

Can you avoid tax by becoming Cypriot resident and selling UK property?

Going overseas and selling UK property without being taxed in the UK or overseas is very attractive to many property investors. Have you ever thought about Cyprus? It's one of the low-tax havens of Europe, as well as having a strong UK expat presence and is itself a popular property investment location . . . keep reading

Offshore tax article - Can you use the capital gains tax article in a double tax treaty to avoid UK CGT?

This is something we're asked about regularly, so we've put what you need to know in this article. Avoiding CGT is a popular tax planning objective and this makes any opportunity to avoid it very appealing. This article looks at a couple of CGT articles from tax treaties and examines how these impact on the UK and overseas tax treatment. . . . keep reading

Tax relief for property investors on overseas interest and finance costs.

If you're borrowing money from overseas to invest in property you need to assess firstly what level of tax deduction you'll be entitled to for the interest and secondly whether you'll be caught by the withholding tax rules. If you are caught by the withholding tax rules you'll also need to consider what options you have to avoid having to pay 20% of the interest to the UK taxman. This article tells you what you need to know to avoid UK withholding taxes on overseas interest. . . . keep reading

Offshore tax article - Tax treaty residence and why it can be important in reducing your UK tax liability
Losing your UK tax residence is becoming more difficult, particularly if you're looking to retain significant UK ties after you leave the UK. This is why if you're looking to emigrate from the UK establishing treaty residence overseas makes sense. It essentially provides for a form of back up as if you can establish treaty residence overseas at least you can apply the double tax treaty on the basis of your non UK residence. This article looks at how you can establish your treaty residence overseas and what tax impact this will have including the position of dual residents. . . . keep reading

How to claim an exemption from UK tax under a double tax treaty

More and more people are either living and working abroad or have assets overseas. In this case there is certainly the possibility that any income could be taxed both in the UK, as well as overseas. This is where double tax treaties come in - they can provide for either a complete UK tax exemption or a tax credit (reduction in the UK tax charge). If you're concerned about any 'double taxation' you need to understand how you can claim either tax relief for overseas suffered or the complete exemption for UK taxes. This article runs through how you claim relief under a double tax treaty and includes screen shots of the claim forms. . . . keep reading

Offshore tax article - How to claim double tax relief on UK pensions received overseas

A step by step look at the relevant form you'll need to complete to claim double tax relief on UK pensions. This will then allow you to receive the pensions free of UK income tax, or at the reduced rate as laid down in the relevant double tax treaty. . . . keep reading

Offshore tax article - How a UK private, government and state pension is taxed when you're overseas, including a schedule showing the impact of double tax treaties
Given the number of people emigrating overseas the tax treatment of UK pensions is becoming of importance to more and more people. You'll find that UK income tax is automatically deducted at source from UK pensions and many expats that establish non UK residence overseas will want to try and receive the UK pension free of UK tax is possible. This is where double tax treaties come into play, as they can eliminate the UK income tax charge on pensions completely. This article looks at how these double tax treaties work to avoid UK tax and includes schedules showing the impact of a number of double tax treaties on private government and state pensions. . . . keep reading

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