Residency - HMRC problems?

mtl3108


Joined: 26/07/2010
Posts: 3

Message Posted:
30/07/2010 08:58

Has anyone who has emigrated to N. Cyprus had any dificulties persuading the HMRC that they have become non-tax-resident in the UK? I am thinking in particular of someone who maybe has family in the UK and makes regular return visits.

waddo


Joined: 29/11/2008
Posts: 1966

Message Posted:
30/07/2010 09:22

If you receive any pension or payment as a result of having been employed by HM Government then you will pay tax on it - at source - no matter where in the world you live. There is no way out of it at all even if you have completed the paperwork to say you have emigrated for ever and will never return.



You paid tax on your wages to start with before pension contributions were taken and now you get to pay tax on your pension again - however you do keep all the benifits of ??????????? Hmmm, seems like you don't get any benifits at all apart from the knowledge that you are supporting more imigrants in the UK than you are anywhere.

beeches


Joined: 17/03/2009
Posts: 134

Message Posted:
30/07/2010 09:42

I recently wrote to HMRC about this and the reply I had said "The UK has no Double Taxation Agreement with Northern Cyprus under which any tax relief could be offered. Your UK Pension will continue to be taxed in the UK as now".

wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
30/07/2010 09:42

Waddo

Pension contributions and made free of tax that is why you pay tax on your pension income after allowances except for the tax free lump sum when you first draw down your pension

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
30/07/2010 09:45

Sometimes there is a trade off that has to be considered. One example is bank accounts, I know you may say "I am never going back" but what if.............. If you have to return and do not have a current bank account it is 99% impossible to open a new account because of all the documentation required.



Also what about State Retirment Pension, health care, benefits etc. I do not like the idea of people "returning" to take advantage of the system but when you have paid in for 40 years or whatever.......!



I have a government pension that has to be paid net of UK tax so I will keep all the options open even though my stated aim is never to return. But that golden oldie "never say never" keeps returning.



Other than moving money Offshore after selling our UK home to avoid tax on savings there is no reason to do much more. If you have savings here they are taxed at source as in UK. So for me I am keeping all options open.

blade


Joined: 19/06/2010
Posts: 1286

Message Posted:
30/07/2010 10:02

As long as you keep registered on the electoral role, possibly at a friends or familys address, there is no problem with getting a uk current account.

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
30/07/2010 12:04

blade, that is rubbish.



You have to produce identification documents with your name and and address on including driving licence, utility bills, council tax bills etc. If I remember correctly from opening a new account in 2005 you had to supply FOUR seperate items of ID. Because my wife has no dl and all utility bills were in my name she had to rely on the bank accepting 3 itmes only as I had all four items.



This all to do with money laundering and things have not altered in the 4 years we have lived here

waddo


Joined: 29/11/2008
Posts: 1966

Message Posted:
30/07/2010 12:09

blade, can't see the point of useing the family/friends address when you have already told HMRC that you have moved out of the UK permanently? You can still vote no matter where you live.

wanderer, so my military pension and my civil service pension contributions were put into the various funds prior to paying tax on my income? If that is so then why on every military pay statement I ever had the income tax deduction was across the whole income prior to deductions for pension? Not that I don't believe you but I believe the government even less!!!

Once TRNC is acknowledged then we could be looking at either the 5% (South Cyprus) double taxation agreement or the exisiting double taxation agreement for Turkey - Income tax guys are really helpful and if you want to know anything just give them a ring!

nostradamus


Joined: 15/04/2008
Posts: 557

Message Posted:
30/07/2010 15:14

Message 2: this is incorrect. There are several countries whose double taxation agreements with the UK include government based UK pensions being paid gross - the nearest of these countries is the Republic of Cyprus! I have a friend who moved over the border for this very reason and he is now ten grand a year better off. The starting point for tax in the ROC is much higher than UK and tax on pensions is only 6%. There are no deals like this in the TRNC because the country is unrecognised and does not, therefore, have a double taxation agreement.

Harold2555



Joined: 19/04/2008
Posts: 1139

Message Posted:
30/07/2010 16:41

Getting back to the point of the original post, this is always a problem if you keep significant contact with the UK no matter where you choose to move to. Income tax in the UK is based partly on residence but there is a sweep up phrase "ordinarily resident" that goes beyond the counting days in the country etc that many people will trot out. i had a tax tutor many years ago who maintained that if you had a house available to live in and you visited the UK for even a day, you could be classed as Ordinarily resident in the UK.



There was a recent case of a man who did all the correct things with regard to days etc. but HMRC proved that his ties to the UK were so strong (wife lived here, children went to school here etc) that he was judged Ordinarily resident and therefore subject to UK tax on worldwide income. It was a fortune!



Harold