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Expats Face £400 Million Tax Raid

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I still utterly despise the fool, but this could be a piece in the jigsaw to help prices come down.

Maybe they know B2L parasites are easy targets to fund the govt waste.

http://www.telegraph.co.uk/finance/11027075/Expats-face-400-million-tax-raid.html

Expats who rent out their homes in Britain will be stripped of the right to use the personal allowance, under a tax raid prepared by George Osborne.

Britons could be forced to return from retirements overseas if the Chancellor presses ahead with plans to force non-residents to pay tax on all their UK income, accountants warned.

Retirees drawing a Government pension are also likely to be hit by the proposals, which could cut a couple’s income by up to £4,000 a year.

At present, EU nationals and British expats are entitled to offset income earned in the UK against the £10,000 personal allowance.

Mr Osborne first indicated his desire to curtail the allowance in the March budget.

Under Treasury proposals released for consultation, the allowance would be restricted to people with a “strong economic connection” to Britain, bringing the tax regime into line with the US, Canada and much of the EU.

The move could affect up to 400,000 people and raise the exchequer an extra £400 million a year.

It would include 175,000 people who live abroad and earn an income from property in Britain.

Many of the 1.2 million British retirees living overseas will not pay extra tax on their pension because they are either UK residents for tax purposes, as they spend half the year in Britain, or because most state or private pensioners are only taxable in the country of residence.

However, UK government pensions are only taxable in Britain, meaning that unless the Treasury introduces exceptions, former civil servants, NHS workers and council officials living overseas will pay more tax.

British diplomats and missionaries who are currently entitled to the personal allowance may also be hit by the tax changes, the Treasury consultation says.

While some expats will be able to claim tax relief from their country of residence, those living in low-tax jurisdictions - such as Hong Kong and Dubai - will pay more tax overall.

Jackie Hall, a tax partner at accountants Baker Tilly, said expatriates should consider selling their UK rental properties and reinvesting the money in shares or property abroad.

Some Britons may be forced to abandon a carefully-planned retirement overseas and return to Britain if the tax changes mean they no longer have enough to live on, she warned.

“Our pensioners who’ve gone abroad are going to suffer the biggest impact,” she said.

“If you have already jumped ship and are reasonably comfortable, this could turn the tide against you. Those people may begin to struggle because they haven’t got the income in retirement that they thought they had.”

The Treasury said no decision has yet been made.

A spokesman said: “The increases the government has made to the personal allowance support hardworking people by helping them to keep more of the money they earn and, as a result, is one of the most generous in the world.

"At the same time, we believe that it is reasonable to consider whether non-residents who receive income from the UK are paying a fair share of tax on that income, in this country.”

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But according to her representatives, she has been approached by all three major parties to run for a seat in Birmingham.

'She is tempted by the idea, but there just isn't enough money in it,' Mr Tomes added.

“Nick Clegg has invited her to go on his show and all the parties have approached her to represent them.

“She is a Lib Dem at heart but if she ran she would probably go independent.

It sounds like she would be a perfect fit for the LibLabCon party. For sure she would fit in it anywhere.

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I still utterly despise the fool, but this could be a piece in the jigsaw to help prices come down.

The move could affect up to 400,000 people and raise the exchequer an extra £400 million a year.

It would include 175,000 people who live abroad and earn an income from property in Britain.

More views on it here. I was wondering why Telegraph bringing it back up now, but it appears HM Treasury has been looking at it again since Budget.

I'm not sure I would want it to affect UK home-owner expats working for firms (Kurt B for example - although he is renting his house out as I understand it) when they want to keep their homes to return to UK at a later point with all their foreign-earned treasure earnings to go into UK bank accounts. More just the speculators/BTLers. Away from how just or not it is, at this point, I'll take anything which improves supply to market and puts more pressure on owner to accept a lower price from diminishing numbers of buyers.

From Tax & Regulation Jul 28 2014 BY: Simon Danaher , Online Editor , International Adviser

.. In this year’s Budget, the Government announced its intention to consult on whether entitlement to the UK personal allowance should be restricted for non-residents.

The consultation was opened by HM Treasury earlier this month, with the government body setting outs its case for removing access to the “generous” entitlement from UK non-residents.

http://www.international-adviser.com/news/tax-regulation/threat-to-tax-break-for-expats-under-consultation

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Nasty one of it affects pensions. Surely that would violate the terms on which you put money into a pension in the first place?

Preparation for what might happen if the Little Englanders were to get us out of the EU and the currency collapses?

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More views on it here. I was wondering why Telegraph bringing it back up now, but it appears HM Treasury has been looking at it again since Budget.

I'm not sure I would want it to affect UK home-owner expats working for firms (Kurt B for example - although he is renting his house out as I understand it) when they want to keep their homes to return to UK at a later point with all their foreign-earned treasure earnings to go into UK bank accounts. More just the speculators/BTLers. Away from how just or not it is, at this point, I'll take anything which improves supply to market and puts more pressure on owner to accept a lower price from diminishing numbers of buyers.

where is this income currently taxed?...if its abroad, then like all the moans about google and the coffee houses, let them pay tax earned here, here.

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where is this income currently taxed?...if its abroad, then like all the moans about google and the coffee houses, let them pay tax earned here, here.

Under EU tax agreements income from property is taxed in the country in which the property is located. In this case, the UK. It would not be declared in the country of residency.

I am frankly utterly gob-smacked that UK "expats" (better known as emigrants, or in the country they have moved to, immigrants) are able to take advantage of the UK personal tax-free allowance whilst being domiciled abroad. Such allowances are normally for those working, and living, in a country - for obvious reasons.

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400,000 Brits returning to the UK competing with ftb's? now how could that affect house prices?

That's less than 1% of the population

Do the maths for once

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The tax takers no nothing other than taking more.

Who do we vote for to pay less tax ?

In order for the state to survive, it has to do two things:

1. Raise as much tax revenue as it can (used to increase the size of the state by employing more people and for buying votes using bribes such as benefits payments)

2. Get the maximum number of votes.

No party will reduce tax, because it goes against what a party is.

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Because HMRC have really shown us all who's boss with Google, Startbucks,etc <_<

Far easier to pick on those who don't have so many lawyers to fight back.

Eventually they take to much and what happens after that ?

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Under EU tax agreements income from property is taxed in the country in which the property is located. In this case, the UK. It would not be declared in the country of residency.

I am frankly utterly gob-smacked that UK "expats" (better known as emigrants, or in the country they have moved to, immigrants) are able to take advantage of the UK personal tax-free allowance whilst being domiciled abroad. Such allowances are normally for those working, and living, in a country - for obvious reasons.

Thats not true, any EU country that has a wealth tax the tax is paid in the country of residence., there are only a handful of countries in Europe that have this tax though, France, Spain,Norway and Nederlands, Granted the rates are derisory and non declaration of assets is common. They work exactly the same way as the Swiss wealth tax (on Global assets) which naturally being a tax haven Sarc collects the largest nominal amount out of them all because its set at the lowest level of introduction

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Because HMRC have really shown us all who's boss with Google, Startbucks,etc <_<

Far easier to pick on those who don't have so many lawyers to fight back.

Even then the UK employees of Google Starbucks etc still inevitably pay uk income taxes, so proportionately they already contribute more than expat properdie investors

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Eventually they take to much and what happens after that ?

Rents would have to drop because people wont have the money to pay them oh and house prices as well. What a disaster that would be.

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Thats not true, any EU country that has a wealth tax the tax is paid in the country of residence., there are only a handful of countries in Europe that have this tax though, France, Spain,Norway and Nederlands, Granted the rates are derisory and non declaration of assets is common. They work exactly the same way as the Swiss wealth tax (on Global assets) which naturally being a tax haven Sarc collects the largest nominal amount out of them all because its set at the lowest level of introduction

Wealth taxes are a somewhat different issue as they are levied on net worth rather than direct income.

You are correct in stating that for UK emigrants, property they retain in the UK will count towards the relevant net worth calculations.

I was, however, referring to income from property (i.e. rent) which is the subject of this thread. Direct taxation on rental income is levied in the EU country within which the property is located, regardless of residency. Wealth tax only applies to rental income if an individual both (1) exceeds the net worth limits above which the wealth tax becomes due and (2) saves that rental income thus increasing their net worth. Even then, wealth tax on this rent would be a tiny fraction (<1%) compared to the 20% UK basic rate of income tax.

This is an important point as emigrants renting out property in the UK rely upon UK tax-funded services (road repair, emergency services etc.) in order to maintain their rental income. As they do not have UK residency, however, they do not contribute to these services in any way. it is hence bizarre that they currently receive the personal tax-free allowance.

Edited by Cozza

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Wealth taxes are a somewhat different issue as they are levied on net worth rather than direct income.

You are correct in stating that for UK emigrants, property they retain in the UK will count towards the relevant net worth calculations.

I was, however, referring to income from property (i.e. rent) which is the subject of this thread. Direct taxation on rental income is levied in the EU country within which the property is located, regardless of residency. Wealth tax only applies to rental income if an individual both (1) exceeds the net worth limits above which the wealth tax becomes due and (2) saves that rental income thus increasing their net worth. Even then, wealth tax on this rent would be a tiny fraction (<1%) compared to the 20% UK basic rate of income tax.

This is an important point as emigrants renting out property in the UK rely upon UK tax-funded services (road repair, emergency services etc.) in order to maintain their rental income. As they do not have UK residency, however, they do not contribute to these services in any way. it is hence bizarre that they currently receive the personal tax-free allowance.

Not true, the 20% vs 1% is apples and pears, one is a tax on asset value, the 20% is a tax on the dividend (yield) which is 20% of 3-5% yield, you are comparing asset value taxes to yield taxes, in an age of low yields without accounting for this yield is nonsense

and whilst you say net worth is different to income id fundamentally disagree, when you live in a world of extreme leverage, net worth is identical to income, the difference has been leveraged away. When the state behaviourally supports leverage (as it has done for decades) asset wealth and income are identical, they are assets to be leveraged and sweated

The only part id agree with is your last paragraph which is what i was highlighting in my post, i pay more tax to the swiss govt on my UK (unpaid for monopoly privilege than i do to the very the very state that bestows that benefit on me), that was my point. In a state where monopoly and leverage is rewarded and anyone with half an unbiased reality based history will realise when this debt cycle eventually ends it has been based entirely on as all others state distortion and enforced monopoly, you get monopolists and devil may care leverage who knew, its exactly what the most behaviouraly significant factor (taxes) demand, its only been historically factual for a few thousand years, clearly we need more time to study

I may berate the UK here, but they are hardly unique, every state on the planet has been encouraging leveraged monopoly for at least a couple of generations, quelle suprise all credit has gone into grabbing this advantage above production, who knew

Edited by Georgia O'Keeffe

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Not true, the 20% vs 1% is apples and pears, one is a tax on asset value, the 20% is a tax on the dividend (yield) which is 20% of 3-5% yield, you are comparing asset value taxes to yield taxes, in an age of low yields without accounting for this yield is nonsense

and whilst you say net worth is different to income id fundamentally disagree, when you live in a world of extreme leverage, net worth is identical to income, the difference has been leveraged away. When the state behaviourally supports leverage (as it has done for decades) asset wealth and income are identical, they are assets to be leveraged and sweated

The only part id agree with is your last paragraph which is what i was highlighting in my post, i pay more tax to the swiss govt on my UK (unpaid for monopoly privilege than i do to the very the very state that bestows that benefit on me), that was my point. In a state where monopoly and leverage is rewarded and anyone with half an unbiased reality based history will realise when this debt cycle eventually ends it has been based entirely on as all others state distortion and enforced monopoly, you get monopolists and devil may care leverage who knew, its exactly what the most behaviouraly significant factor (taxes) demand, its only been historically factual for a few thousand years, clearly we need more time to study

I may berate the UK here, but they are hardly unique, every state on the planet has been encouraging leveraged monopoly for at least a couple of generations, quelle suprise all credit has gone into grabbing this advantage above production, who knew

If I was viewing this from the perspective of the wealthy, asset-rich I'd agree with you.

I'd argue that for most emigrants, asset taxes (wealth tax) and yield tax (i.e. direct tax on rent 'earned') are fundamentally different as their net individual worth is unlikely to exceed wealth-tax thresholds. Sure, those with million-pound rented London property will pay more wealth tax when that property increases in value. That is not 'most' emigrants though.

Generally emigrants move abroad to retire with a pension (not counted for wealth tax purposes) and perhaps a property in the UK to rent out. They live basic lifestyles from their pension and rent income. The difference for them of 20% tax on rental income versus no tax is huge.

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