Paying tax for UK citizens on interest earned in Cambodia
Paying tax for UK citizens on interest earned in Cambodia
Anyone know specific info on a UK citizen residing full-time in Cambodia earning interest in a Cambodian financial institution? Are they liable to pay tax on the interest to the UK (even though tax has been paid already locally)?
Thanks mucho for any and all info...
Thanks mucho for any and all info...
I love fish and chips with vinegar in newspaper!!!
Check hereDagenham wrote:Anyone know specific info on a UK citizen residing full-time in Cambodia earning interest in a Cambodian financial institution? Are they liable to pay tax on the interest to the UK (even though tax has been paid already locally)?
Thanks mucho for any and all info...
http://theexpatriatetaxfactory.com/101_ ... stions.php
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If you are considered non-resident in the UK for tax purposes, you will not have to pay tax on the interest. Just be aware that the UK has tightened the rules on interpreting how tax residency is determined, and HMCR can now take into consideration things like maintaining a UK residence or operating a business there. Additionally, it used to be possible to spend up to 90 days in any one tax year, or an accumulated 180 days in any three year period, back in the UK without affecting non-residence status. This was changed in April of last year to only 14 days in any tax year, with no accumulation.
More information here:
http://www.hmrc.gov.uk/international/res-dom.htm
The UK has no double-taxation treaty with Cambodia:
http://www.hmrc.gov.uk/taxtreaties/dtdigest.pdf
so the fact that tax has been deducted locally is unfortunately irrelevant to any tax liability in the UK.
More information here:
http://www.hmrc.gov.uk/international/res-dom.htm
The UK has no double-taxation treaty with Cambodia:
http://www.hmrc.gov.uk/taxtreaties/dtdigest.pdf
so the fact that tax has been deducted locally is unfortunately irrelevant to any tax liability in the UK.
So if they can tax you on your overseas income I guess you can claim on your overseas losses as well.
Its hardly likely the uk tax authorities are going to bother checking with acleda for interest payments to a couple of dozen British account holders.
The new HMRC statutory residence test is effective from April 2013, this simplifies the question of whether you are tax resident in the UK.
The link posted above by Mèo Đen gives a decent overview, though I would question its statement that the SRT is applicable to inheritance tax (in Q1), as inheritance tax liability is based on domicile rather than residency.
You should never rely on any third party documentation, or trust the opinions of financial advisors.
You should always refer to the current HMRC documentation RDR3 (pdf) available from the HMRC website.
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The link posted above by Mèo Đen gives a decent overview, though I would question its statement that the SRT is applicable to inheritance tax (in Q1), as inheritance tax liability is based on domicile rather than residency.
There are three main tests which are taken in sequence, once you meet one of these tests the others should be ignored:Mèo Đen wrote:Check here
http://theexpatriatetaxfactory.com/101_ ... stions.php
- Automatically non-resident
- Automatically UK tax resident
- Sufficient ties tests.
You should never rely on any third party documentation, or trust the opinions of financial advisors.
You should always refer to the current HMRC documentation RDR3 (pdf) available from the HMRC website.
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^ Pretty much all true, apart from relying on Her Majesty's Revenue and Customs (HMRC). They deliberately obfuscate tax issues and, incredibly, are now domiciled offshore for tax purposes. Sold off as part of our small government inheritance.
The new boss is also the guy they were trying to prosecute for years after his very successful career as head of tax avoidance at PWC.
You just need to fill in the correct form (which HMRC will give you) to become formally non-resident for tax purposes, and Anglo-Saxon Capitalist Bob is your uncle.
Fill in a tax return even if you derive the VAT on diddly squat from the UK - good practice for keeping 'em off your back - and you'll be left alone to engorge yourself on foreign earnings till gout and syphilis take you down. You will also still have a personal tax allowance of 10.5k sterling or so on UK earnings.
I would recommend this site long before the now barely governmental HMRC:
http://www.wealthprotectionreport.co.uk/public/main.cfm
This is OK too:
http://www.shelteroffshore.com/
You may have to pay a few notes to get to some of the articles.
The new boss is also the guy they were trying to prosecute for years after his very successful career as head of tax avoidance at PWC.
You just need to fill in the correct form (which HMRC will give you) to become formally non-resident for tax purposes, and Anglo-Saxon Capitalist Bob is your uncle.
Fill in a tax return even if you derive the VAT on diddly squat from the UK - good practice for keeping 'em off your back - and you'll be left alone to engorge yourself on foreign earnings till gout and syphilis take you down. You will also still have a personal tax allowance of 10.5k sterling or so on UK earnings.
I would recommend this site long before the now barely governmental HMRC:
http://www.wealthprotectionreport.co.uk/public/main.cfm
This is OK too:
http://www.shelteroffshore.com/
You may have to pay a few notes to get to some of the articles.
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Billy,BillyB wrote:The new HMRC statutory residence test is effective from April 2013, this simplifies the question of whether you are tax resident in the UK.
The link posted above by Mèo Đen gives a decent overview, though I would question its statement that the SRT is applicable to inheritance tax (in Q1), as inheritance tax liability is based on domicile rather than residency.There are three main tests which are taken in sequence, once you meet one of these tests the others should be ignored:Mèo Đen wrote:Check here
http://theexpatriatetaxfactory.com/101_ ... stions.phpIn my case I have been non-resident for decades, so under the first test I will remain non resident as long as I spend less than 46 days per tax year in the UK, the other tests (2+3) can be ignored. If I was to spend more time in the UK I would have to consider the other two tests.
- Automatically non-resident
- Automatically UK tax resident
- Sufficient ties tests.
You should never rely on any third party documentation, or trust the opinions of financial advisors.
You should always refer to the current HMRC documentation RDR3 (pdf) available from the HMRC website.
@
Good information thank you.
My understanding is that if you qualify as non-resident (not liable for UK income tax) the days permitted in the UK to stay as non-resident status are 90 or less (although I have always been under 45 anyway). The 90 day rule was clearly explained and confirmed to myself from a UK Tax professional.
For anyone wishing to carry out the Statutory Residence Test (SRT) there is a link here:
http://www.hmrc.gov.uk/international/rdr3.pdf
Again seeking professional advice is always the best course of action, fortunately for myself this is provided by my company.
I tend to sleep in the nude. Which isn't a bad thing except for maybe on those long flights.
If working out your tax residency status in the UK is that difficult then the tax authorities are doing something wrong. Last time I checked their rules there were potential issues if you returned within too short a time period but otherwise it was standard enough. Obviously if your situation is unusual and there's any doubt you need advice.
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It seems that the number of days permitted in the UK depends on residence in previous years and whether or not you are working overseas:Kennzo wrote: Billy,
Good information thank you.
My understanding is that if you qualify as non-resident (not liable for UK income tax) the days permitted in the UK to stay as non-resident status are 90 or less (although I have always been under 45 anyway). The 90 day rule was clearly explained and confirmed to myself from a UK Tax professional.
For anyone wishing to carry out the Statutory Residence Test (SRT) there is a link here:
http://www.hmrc.gov.uk/international/rdr3.pdf
Again seeking professional advice is always the best course of action, fortunately for myself this is provided by my company.
Automatic non-residence test
You will be classified as non-UK resident in tax year 2013/14 if any of the following apply:-
you were resident in the UK for one or more of tax years 2010/11, 2011/12 or 2012/13 and spend fewer than 16 days in the UK in 2013/14;
you were resident in the UK for none of tax years 2010/11, 2011/12 and 2012/13 and spend fewer than 46 days in the UK in 2013/14; or
you work full-time overseas in 2013/14 and spend fewer than 91 days in the UK of which fewer than 31 days are working days.
http://www.mondaq.com/x/233420/general+ ... ed+Spouses
Good advice to take professional advice though, if one is likely to be affected.
Hi Kennzo.Kennzo wrote:My understanding is that if you qualify as non-resident (not liable for UK income tax) the days permitted in the UK to stay as non-resident status are 90 or less (although I have always been under 45 anyway). The 90 day rule was clearly explained and confirmed to myself from a UK Tax professional.
For anyone wishing to carry out the Statutory Residence Test (SRT) there is a link here:
http://www.hmrc.gov.uk/international/rdr3.pdf
Again seeking professional advice is always the best course of action, fortunately for myself this is provided by my company.
The 90 day rule was vague, and non specific, open to wide interpretation as in the Robert Gaines Cooper case, where a business man applied a strict interpretation of the rules for decades, and got shafted by the taxman who decided to "interpret the rules differently" and act retrospectively.
The SRT is supposedly an attempt to clarify the situation, and give it a legal basis rather than relying upon interpretation of the guidelines.
Part one is fairly clear as summarised above by PattyFlipper in the post above, in my circumstance I will be OK as long as I spend under 46 days in the UK.
Part two is where it gets very ambiguous and is still wide open to interpretation, the big question for me being "what is a home".
And if you feel that you need the reassurance of professional advice please do not trust the advice that you are given, check it out yourself from the RDR3 document, don't trust advice given by your employer either, the advice could well be outdated.
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It's quite laughable that the HMRC had to write so many rules and still vague in its interpretations.
I'm happy with my initial advice though taking further time on next visit to UK to confirm it all.
Advice comes from a large chartered accountants group in Manchester so I'm comfortable with their advice.
Thanks Billy.
I'm happy with my initial advice though taking further time on next visit to UK to confirm it all.
Advice comes from a large chartered accountants group in Manchester so I'm comfortable with their advice.
Thanks Billy.
I tend to sleep in the nude. Which isn't a bad thing except for maybe on those long flights.
For the sake of the tax authorities you should keep good records of how many days that you spend in the UK. No point risking future disputes with the taxman if you are not certain where you were on a certain date.
Keeping tickets/boarding passes is easier these days as most tickets are electronic, and they can be archived as pdf documents. However the most important thing for me is a precise record of my flights in/out of the UK saved as an excel spreadsheet with calculated totals for each tax year.
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Keeping tickets/boarding passes is easier these days as most tickets are electronic, and they can be archived as pdf documents. However the most important thing for me is a precise record of my flights in/out of the UK saved as an excel spreadsheet with calculated totals for each tax year.
@
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