uk remittance basis

[Ruy]

Hi,

I would be happy if anyone could help with this tax question.

I am resident but non-domiciled in the UK. By the remmitance rule, I am taxed on foreign investment income only up to the amount that I send back to the UK.

I would like to understand if this sequence I have i mind is feasible or if there is any key point I am missing:

1- Send my savings to an investment broker abroad (EU)
2- Open an international bank account, anything not based on UK.
3- Withdraw my investment income to this offshore account.
4- When having expenses abroad as a tourist, use the funds from this offshore account.

With these steps, would I be able to not pay taxes on the investment income without doing anything 'wrong'? Is there any pratical detail I am missing?

The remmitance rule also considers anything at all that you consume within the UK. I would suppose this excludes plane tickets from this consideration, is that correct?

Thanks a lot

 

[Martin Everson]

Savings from outside the UK? From where?

Nothing wrong here

Nothing wrong here

Nothing wrong here

Yes

Yes. If you invest in a UK situs asset from abroad it is considered a remittance︁ and you will be taxed if they find out. For example if you buy a︂ UK stock or fund in your offshore brokerage account. Also while you are resident in︃ UK most brokers who have a UK operation will direct your account application to open︄ an account internally to the UK entity even if you apply via their non-uk website.︅ I think IB does that. So you need to check REALLY carefully where the investment︆ account is actually based you are opening as a UK resident.

If ticket︉ payment is processed in UK with offshore money then its rightly a remittance. Pick a︊ site that processes tickets outside the UK like in Luxembourg or Ireland for example.

 

[Ruy]

Thanks a lot Martin. I wasn't considering at all the possibility of brokers internally directing‌ my application to the uk, that was really helpful.

I asked this considering small amounts‍ to be used as tourism expenses. Would you think it is feasible to use this⁠ on a broader sense of not paying any tax from all my assets if I⁤ move residency to another country?

The UK and other European countries have remmitance rules saying⁣ that taxation is not applicable when bringing assets accumulated before the residency started.

If I⁢ eventually leave the UK and become a resident in another country with such rule, would︀ it be feasible to say that I would be able to bring the assets on︁ these offshore broker accounts to this new country without paying neither UK nor 'new country'︂ taxes?

I know this would depend on the country rules and may vary depending on︃ specifics but would you say this is a feasible route and people have successfully made︄ it before or there is again some killer detail that would make it impossible in︅ practice?

 

[Martin Everson]

Yes

Money earned⁢ before you move to a new country is considered capital and not taxed in new︀ country.

It's feasible as I did it already.