Remittance basis v Fiscal nomad status - USERNAME: edtheartist

Tax Question:

Further Non Dom vs Tax Nomad Questions. Would my German Brother and Sister in Law have to prove residency for Non Dom Status?

Would that just require being in The UK for a certain amount of time per year or would they need to rent a property? How do the register Non Dom status with the HMRC? Would they be liable for income tax therefore on their Artwork when sold through UK Galleries?

Is their Capital and Income free from taxation in their Isle of Man account? If they chose to be tax nomads does that mean they don´t register for tax anywhere or do they have to register for tax exemption in some Jurisdiction if they travel within the EU. (They are already de-registered in Germany). I want to wrap this up soon and come to a conclusion and just need the answers to these questions and how it is best for them (Being of moderate income) to organise these two possibilities without necessitating expensive tax consultation or accountancy.

They just need to know (if they are tax nomads) if they can arrange for their income to be paid into their Isle of Man account without taxation or how the same arrangement would work with UK Non Dom Status. Finally

finally any idea how I find out if sale of Artwork is taxable at source or not in Germany, Holland, Spain, Italy, UK etc.

Many Thanks

Answer:

Further Non Dom vs Tax Nomad Questions. Would my German Brother and Sister in Law have to prove residency for Non Dom Status?

They wouldnt have to be UK resident to be non domiciled, however to take advantage of the remittance basis in the way you describe they would need to be UK resident.

Would that just require being in The UK for a certain amount of time per year or would they need to rent a property?

There are lots of classifications that govern residence status. If they're in the UK for >183 days in a tax year they would be UK resident.

If they could show that they intended to base themselves in the UK they would be UK resident.If they knew when they came to the UK that there visits would exceed 90 days per tax year (on average over the last 4 tax years) then they would be UK resident.

How do the register Non Dom status with the HMRC?

To claim the remittance basis they would file a tax return.

Would they be liable for income tax therefore on their Artwork when sold through UK Galleries?

Yes -- if that is their trade. They would need to argue that their trade was carried on outside the UK to avoid tax on foreign disposals.

Is their Capital and Income free from taxation in their Isle of Man account?

If they are non doms claiming the remittance basis then providing income from overseas assets or sources was retained overseas there should be no UK income tax.

If they chose to be tax nomads does that mean they don´t register for tax anywhere or do they have to register for tax exemption in some Jurisdiction if they travel within the EU. (They are already de-registered in Germany).

Yes generally a tax nomad is not registered for tax anywhere. However occasionally they may set up tax residence in a friendly jurisdiction (eg Malta) which they then use to travel from.

They just need to know (if they are tax nomads) if they can arrange for their income to be paid into their Isle of Man account without taxation or how the same arrangement would work with UK Non Dom Status. F

If they were tax nomads and not resident for tax in any jurisdiction they could sell artwork free of tax. If they were UK resident but using the remittance basis they would need to be able to argue for a foreign trade and then retain the proceeds abroad.

About the Author

He worked in Ernst & Youngs Entrepreneurial Services department for a number of years before setting up his own tax planning practice. He is now a full time tax author.

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