Non-Resident and Offshore Tax Planning by Lee Hadnum

I like this series of books from Tax Cafe written for the British Tax Payer because they explain the very technical subject of UK Taxation in Layman’s terms and in a thorough manner. The excellent use of examples throughout each tax guide clarifies even the most challenging technical aspects of tax and the jargon that is used to describe that tax legislation. Each book in this series is re-written annually in April after the annual UK Government Budget announcement, making them entirely accurate to date reading.

This particular book checks out how a British Tax Payer can avoid all UK tax by becoming non-resident for Tax Purposes in a given year. The simple rule is to be in the country for not in excess of 90 days each tax year to achieve the non-resident status. However, it’s not as simple as that! The author of the article was non-resident at the time of writing this article to make the most of his UK non-domicile tax status. He found this book and Lee Hadnums other two books, Tax Saving Tactics for Non-Doms and The World’s Best Tax Havens extremely useful in this particular piece of tax planning.

This book will be of great interest to those British Tax Payers who would like to become non-resident to pay zero UK income tax and zero UK capital gains tax. This is common practise in the UK for those selling a property portfolio in preparation for their retirement to a warmer climate. The guide will also be of interest to Foreign Nationals known as Non-domiciles (Non-doms) who would like to benefit from their valuable UK tax status to pay little or no tax on their foreign income and anyone interested in tax planning with offshore companies and offshore trusts. Lee Hadnum’s other guide The World’s Best Tax Havens should be viewed side by side with this guide to assist in tax planning with offshore companies, trusts and foundations. Others who will find this guide invaluable will be those working abroad in foreign employment or contractors who still reside in the UK.

The author then goes on to explain what you have to do so that you can go non-resident and he explains recent legislation changes and how they may affect you. The one that he spends a bit of effort on is proof that you have severed your links with the UK as the 90 day rule is no longer enough should the Inland Revenue decide to investigate your tax affairs. This is an area which many non-residents are not aware of and many are caught out by these new rules annually, at great expense. This is valuable information to avoid an unpleasant surprise at a later date.

Once you have achieved your non-resident status the guide describes how to avoid tax on rental income, dividends, pensions and employment income. He also spends time on how business owners can slash their tax bills when they emigrate. Many people choose to emigrate to sell property and therefore avoid capital gains tax, but this is not as straight forward as previously where a year in Greece or Belgium would achieve this. How to transfer your pension scheme tax-free to an offshore QROPS scheme is covered and Hadnum also explores how to protect your property investments from the tax man when living abroad.

For people approaching pension age and for others whom losing their UK Domicile status will be advantageous, Non-Resident and Offshore Tax Planning considers how to engage in achieving this. (Domicile status and using it to save tax is covered carefully in Lee Hadnums other tax guide, Tax Saving Tactics for Non-Doms) Double taxation relief is covered in some depth because it is no use avoiding UK tax only to have it taken by the country where you are now living and working. The uses of offshore companies and trusts are also examined in this guide but for a more considerable explanation and analysis we would suggest you read the author’s additional tax guide, The World’s Best Tax Havens because it probes the tactics of adopting these structures in greater detail.

Non-Resident and Offshore Tax Planning by Lee Hadnum