You’d think, some 1,000 miles away from the chilly shores of Blighty, that you would be safe from the attentions of the UK Revenue wouldn’t you?
Afterall there are more pressing problems at home such as a pending election or ministers going down like ninepins either on points of principal or because they can’t manage to make ends meet on a £120,000 ministerial salary (bless them….over SIX GRAND a month NET and they still can’t manage) or overseas humanitarian crises to consider our response to….yet… The Taxman Cometh for expats who earn income back home.
Well they should pay UK tax if they are receiving UK income and benefits, right?
Well yes, of course.
We should all pay our fair share but up until now, UK ex-pats sunning themselves in, typically, Spain could offset their income against the UK personal tax allowance.
Sounds reasonable enough doesn’t it?
Particularly as that income is often earned on homes rented out in the UK which do their bit to shore up the ever diminshing housing stock.
It is estimated that there are around 400,000 people (yes that’s right LESS THAN ONE PERCENT OF THE UK POPULATION) who live abroad and pay tax on UK earnings whilst being domiciled for tax where they reside.
It does kind of shatter a dream that many people have of retiring overseas doesn’t it? For under the new proposals you will have to be resident in the UK for tax purposes in order to benefit from the personal allowance offset and as a result HM Govt will pocket a cool £400m.
So why should you or I be bothered about any of this? If, like me, you are a UK resident tax payer you might think that this makes no difference at all BUT you need to THINK INTO THE FUTURE…..not some fantastical Mid-21st Century stuff but YOUR FUTURE.
When were you thinking of retiring?
Can you retire at all?
What do you reckon could happen as official retirement ages get pushed ever upwards?
Did you want to stay here all year round or spend the winter in warmer climes?
How many times a year would you plan on coming back?
These are all pretty much unanswerable questions as none of us really know what the future will bring BUT one thing I can be pretty confident on, mainly as there are statistics to back it up, is that we are all LIVING LONGER so there will be more retirement for us all to ENJOY.
“Hurrah!” I hear you shout……and then I whisper back….”what about your pension?”
Does kind of put a dampener on that dream of retiring in the sunshine doesn’t it? Between an end to final salary pension schemes, low yields, longer to stretch that pension out for and the Taxman I’ve kind of put a bit of a downer on it haven’t I?
Actually NOT SO.
You can do something about it – start creating residual income to secure YOUR financial future.