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Offshore tax planning

The rules around offshore tax can be complex, but effective planning can result in savings. Read our guide to offshore matters:

Going abroad to live

The tax rules have changed recently and you will need to take care if you are hoping to leave the UK and relinquish UK residence for tax purposes. From 6 April 2013, a statutory residence test is to be introduced which should help clarify matters.
As the test of residence normally applies for a whole tax year, if you are planning to leave the UK ensuring that you go in the last few months of the tax year might provide an extra year of non residence once you have established non UK status.
Planning your visits to the UK in advance is also a good point to start, so that you have some days ‘in hand' for emergencies such as an unexpected family event. In some cases visits to the UK can be ignored, but it is wise to plan carefully in the early years after departure.
You should also be aware that although leaving the UK takes effect for income tax purposes almost immediately, any capital gains realised during the first 5 years abroad can end up being taxed in the UK if you have to relinquish your non resident status.

If you are not UK domiciled, you will only benefit from the remittance basis if your unremitted overseas income and gains are less than £2,000 or you make a claim. This claim will deny you personal allowances and capital gains tax annual exemption, and might also trigger a £30,000 tax charge. The 2011 Budget outlined Government proposals to increase the charge to £50,000 for non-domiciled individuals who have been resident in the UK for 12 years or more and who wish to claim the remittance basis of assessment.
All income remitted to the UK is liable to tax in the UK, irrespective of the basis on which you are taxed. However, it was proposed that the remittance basis charge would be removed from 6 April 2012 when non-domiciled individuals remit foreign income and/or capital gains to the UK for the purpose of commercial investment in UK businesses.
You might wish to review your tax position in the light of this, especially if you have been resident in the UK for several years, as you might in future be liable to the remittance basis charge of £30,000 or more, depending on how long you have been resident in the UK.