Re: FN-FORUM: Income tax on cash generated from abroad

date posted 1st July 2005 08:42


----- Original Message -----
From: "Dai Williams" [EMAIL REMOVED]
To: [EMAIL REMOVED]
Sent: Thursday, June 30, 2005 11:46 PM
Subject: RE: FN-FORUM: Income tax on cash generated from abroad


>
>
> > -----Original Message-----
> > From: [EMAIL REMOVED] [EMAIL REMOVED] On
> > Behalf Of Damon
> >
> > It doesn't matter where the money is earned from, if you live
> > in the UK you pay UK income tax.
>
> IANAL(or IANAA?) but I think strictly it is whether you are "domiciled" or
> something similar for tax purposes, but certainy if you live 100% here you
> should pay tax on all income earned abroad. The only (dodgy) exception I
> think is the sort of blind trusts (sic) that thoroughly untrustworthy
> millionaires and prime ministers use to pretend it is not their money. If
> you are considered domiciled abroad then I think whether or not you bring
> the money into this country becomes an issue, if you are 100% resident
here
> then I believe it is immaterial.
>
Dai, you're nearly correct.

You only pay UK tax, income, corporate or otherwise when you bring the money
into the UKor UK dependant territory. If the money remains in the country of
origin or another country then you are not taxed on it because technically
you haven't earnt it. This means that you can spend it in its country of
origin or otherwise and so long as it never enters the UK. Whether you are
subject to tax in the country of origin is of course another matter - if its
earnt in the EU then you may want to declare it as UK income.
Smuggling it back in in cash form can land you in hot water - thats
undeclared income and gets you a nice hefty fine on top of a tax
investigation and deemed income surcharge.
On the subject of domicile, you are considered ordinarily resident in the UK
if you spend more than 90 consecuative days here or more than 50% of the
days in any given year, or if you own property here and are not ordinarily
domiciled else where. If you want to avoid paying income tax anywhere then
your money needs to be paid into a bank account in say Switzerland or
similar and you needs to spend more than 50% of the year in International
Waters and own no property anywhere.