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  #21  
Old 18.06.2011, 22:46
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Re: HMRC UK tax on Swiss Income

this is the case. it is not simply application of basic rules, but a careful look at individual circumstances. details given so far are not enough to give an answer.

http://ewnbusiness.com/475/tie-break...-tax-residency
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  #22  
Old 18.06.2011, 23:19
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Re: HMRC UK tax on Swiss Income

We got affected by this a while back and we were requested to give every date of entry into the UK and out. The 91 day rule is not as straightforward as you are led to believe. They did some calculation of the days between visits to the UK but in the end all was fine.
After this correspondance, that went on for months, - we were forever receiving letters from them.
Get everything you are told in writing as we had contradictions several times.
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  #23  
Old 19.06.2011, 01:36
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Re: HMRC UK tax on Swiss Income

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Hi,

If you intend to be away for more than a tax year & loose your job, you have to inform the UK revenue as you will then be liable to UK tax. The P85 is only a temporary approval.

As you say "You will be treated as not resident and not ordinarily resident in the UK from 3 April 2008." , that is assuming you actually do work for the period you said you would.

Intention alone is not enough!

If the OP has a wife & children in the UK, it's quite clear & not muddied!
The point I am making is that by intending to stay out for a whole tax year and to remain employed you are, in the begining, able to be classed as a non res of the UK. OF COURSE if you don't realise those intentions then things change and your non res status will be reconsidered by HMRC. I think you are being obtuse on this point. Temporary approval ... ahem.

To date I have not received any communication telling me that my temporary non res status is now more concrete. The original classiification that you call temporary still stands!
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  #24  
Old 19.06.2011, 12:10
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Re: HMRC UK tax on Swiss Income

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The point I am making is that by intending to stay out for a whole tax year and to remain employed you are, in the begining, able to be classed as a non res of the UK. OF COURSE if you don't realise those intentions then things change and your non res status will be reconsidered by HMRC. I think you are being obtuse on this point. Temporary approval ... ahem.

To date I have not received any communication telling me that my temporary non res status is now more concrete. The original classiification that you call temporary still stands!
You will never receive an concrete confirmation from HMRC, that can only obtained that from winning a case in the high court, till then it's just 'an opinion'. The joys of the UK legal system. The recenve will only reconcider your claims if they investigate, th UK system is self assesment.

Interestingly when I left in the UK in 94, I had a discussion with my UK lawyer in 95, he said to be totally sure of no problems later I should do the following:-

Sell my Flat
Sell any UK Shares
Close any interest baring accounts in the UK
Not set foot in the UK for a full tax year minimium

He bellieved it was necessary to demonstrate that you had really left the UK & thats 17 years ago.
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  #25  
Old 19.06.2011, 12:47
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Re: HMRC UK tax on Swiss Income

http://www.lowtax.net/lowtax/html/offon/uk/uktax.html
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  #26  
Old 19.06.2011, 14:41
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Re: HMRC UK tax on Swiss Income

Yup, we all know how slippery the Revenue are on its opinions and these opinions can be changed even taking in retrospective time.

All I am saying is, it is better to have a favourable opinion from the Revenue that you are considered non res. And to get this you should intend to the things we all know we should do from the off.

The chances of being investigated when your bounty of unpaid tax is small (less than 100k) are in my humble opinion very small.
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  #27  
Old 19.06.2011, 15:32
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Re: HMRC UK tax on Swiss Income

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Yup, we all know how slippery the Revenue are on its opinions and these opinions can be changed even taking in retrospective time.

All I am saying is, it is better to have a favourable opinion from the Revenue that you are considered non res. And to get this you should intend to the things we all know we should do from the off.

The chances of being investigated when your bounty of unpaid tax is small (less than 100k) are in my humble opinion very small.
My brother has been under investigation for over 10 years, & to date has received no additional demands for payment. It's got to the stage where he will have to go to the High Court to ask for the case to be closed. He responds to the revenues questions within 30 days, they take 2 years or more before asking for more information.

Interest is payable on unpaid tax at I bilieve 8% copmound so the unpaid tax will double in 9 years before addimg penalties of 100%. It's not something you want to get wrong.

With the UK budget deficet expats are an easy target, expect the heat to go up!
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  #28  
Old 19.06.2011, 16:40
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Re: HMRC UK tax on Swiss Income

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With the UK budget deficet expats are an easy target, expect the heat to go up!
exactly, this is the big worry. the UK is scraping around for tax money and expats could be high on the hit list.
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  #29  
Old 19.06.2011, 17:00
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Re: HMRC UK tax on Swiss Income

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exactly, this is the big worry. the UK is scraping around for tax money and expats could be high on the hit list.
An expat earning 120,000 chf could easily owe the UK revenue £100,000 after 5 years. NI contributions are not deductible in the uk, Swiss pension that can be taken to buy a house almost certainly wont be, same for the various insurances, so your UK taxable income could be 10% or more higher than your Swiss, much of which will be taxable at 40%.



As the UK has only 1 income tax, which is equivalent to Bundessteuer, will you even get credit for Canton or Geminde tax? Geminde tax of course would be equal to rates or whatever they call it now.
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  #30  
Old 19.06.2011, 18:21
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Re: HMRC UK tax on Swiss Income

Thanks to all for the feedback.

On the HMRC website, searching for "HMRC6" brings up the relevant PDF.

Basically stay away for at least 1 year. There is the 180 days (or 90 day average) rule, but a host of other indicators such as maintaining a residence. Investment property is ok.

All of the other stuff such as bank accounts, directorships etc are secondary indicators and it would be prudent to minimise these.
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Old 07.07.2011, 14:50
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Re: HMRC UK tax on Swiss Income

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The UK tax you pay may depend on whether you're 'resident', 'ordinarily resident' or 'domiciled' in the UK. You can be more than one of these - or none.

http://www.hmrc.gov.uk/cnr/simple-gu...-residence.pdf

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

"• Family ties include having a spouse, civil partner, children or other family
members you are close to, in the UK.
• Social ties include membership of clubs and societies and events that you
regularly attend or host. It also includes any regular recreational engagement,
such as returning each year for an annual sporting season.
• Business ties include owning or being a director of a business based in the
UK, or having employment, including self-employment, in the UK. Regular
employment duties in the UK are a tie and you need to consider the extent,
frequency and nature of those duties. It does not matter if the duties
themselves are not taxed, for example because of a DTA.
• Property ties include a house or apartment that you own or lease, or property
held primarily for investment but that also provides you with accommodation
when you are in the UK. A house or apartment provided for your use for the
duration of your time in the UK as part of an employment package is
‘available accommodation’ and is a tie to the UK."
I agree- doesn't sound like you have left the UK for tax purposes. The rules are changing in the UK from next April as well, so probably worth speaking to a UK adviser.
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  #32  
Old 07.07.2011, 14:56
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Re: HMRC UK tax on Swiss Income

These taxes are covered by the treaty, so yes.

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An expat earning 120,000 chf could easily owe the UK revenue £100,000 after 5 years. NI contributions are not deductible in the uk, Swiss pension that can be taken to buy a house almost certainly wont be, same for the various insurances, so your UK taxable income could be 10% or more higher than your Swiss, much of which will be taxable at 40%.



As the UK has only 1 income tax, which is equivalent to Bundessteuer, will you even get credit for Canton or Geminde tax? Geminde tax of course would be equal to rates or whatever they call it now.
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  #33  
Old 07.06.2016, 08:41
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Re: HMRC UK tax on Swiss Income

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An expat earning 120,000 chf could easily owe the UK revenue £100,000 after 5 years. NI contributions are not deductible in the uk, Swiss pension that can be taken to buy a house almost certainly wont be, same for the various insurances, so your UK taxable income could be 10% or more higher than your Swiss, much of which will be taxable at 40%.



As the UK has only 1 income tax, which is equivalent to Bundessteuer, will you even get credit for Canton or Geminde tax? Geminde tax of course would be equal to rates or whatever they call it now.
Morning all, sorry to bump up this
Old thread.

After consulting a uk tax consultant, it would appear that after paying Swiss Witholding Tax of 15% that HMRC would like another 40% of that. I'm in shock to the be honest. Husband was previously advised (by CH HR it would be 25%).

The calc shows a small tax relief but can anyone advise if this is a max £ figure or % as I couldn't find it last night.
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  #34  
Old 07.06.2016, 09:13
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Re: HMRC UK tax on Swiss Income

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Morning all, sorry to bump up this
Old thread.

After consulting a uk tax consultant, it would appear that after paying Swiss Witholding Tax of 15% that HMRC would like another 40% of that. I'm in shock to the be honest. Husband was previously advised (by CH HR it would be 25%).

The calc shows a small tax relief but can anyone advise if this is a max £ figure or % as I couldn't find it last night.
HR.... useless as always and shouldn't have been a surprise UK tax want a nice slice.
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  #35  
Old 07.06.2016, 10:05
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Re: HMRC UK tax on Swiss Income

The whole time exercise is proving to be a massive and expensive mistake.
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  #36  
Old 07.06.2016, 10:13
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Re: HMRC UK tax on Swiss Income

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Morning all, sorry to bump up this
Old thread.

After consulting a uk tax consultant, it would appear that after paying Swiss Witholding Tax of 15% that HMRC would like another 40% of that. I'm in shock to the be honest. Husband was previously advised (by CH HR it would be 25%).

The calc shows a small tax relief but can anyone advise if this is a max £ figure or % as I couldn't find it last night.
Can you provide any other information about your status?!?
Where are you based?
Why does the UK want to tax you?
Are you wanting options and opinions for help or are you just having a moan?

I've never been taxed by the UK for income in CH as I was based here. I've been taxed by Switzerland for UK revenue (small amount for rental income on property).

Many people manage this without it being a "massive and expensive mistake" - something doesn't add up but you've provided absolutely zero context!
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  #37  
Old 07.06.2016, 10:19
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Re: HMRC UK tax on Swiss Income

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Morning all, sorry to bump up this
Old thread.

After consulting a uk tax consultant, it would appear that after paying Swiss Witholding Tax of 15% that HMRC would like another 40% of that. I'm in shock to the be honest. Husband was previously advised (by CH HR it would be 25%).

The calc shows a small tax relief but can anyone advise if this is a max £ figure or % as I couldn't find it last night.
40% of the 15%? Doesn't seem to bad to me.
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  #38  
Old 07.06.2016, 10:50
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Re: HMRC UK tax on Swiss Income

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Morning all, sorry to bump up this
Old thread.

After consulting a uk tax consultant, it would appear that after paying Swiss Witholding Tax of 15% that HMRC would like another 40% of that. I'm in shock to the be honest. Husband was previously advised (by CH HR it would be 25%).

The calc shows a small tax relief but can anyone advise if this is a max £ figure or % as I couldn't find it last night.
You have dug up an old thread, the statutory definition of UK residence became law 2 years ago. It's a long document, however if you work full time abroad with a contract of employment & spend less than 90 days in the UK you don't need to read further.
https://www.gov.uk/government/upload...ted_078500.pdf
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  #39  
Old 07.06.2016, 15:04
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Re: HMRC UK tax on Swiss Income

Apologies for not explaining properly, I've obviously confused others.

Some basic information. Husband took up a role in Zug, kids and I remained in the UK. Commuted backwards and forwards home/office. His ties to the UK are too strong to be considered non resident.

All salaried income has been taxed at source and is referred to as Witholding Tax by employer and Swiss accountant.

Sorting out HMRC returns, and the UK accountant states he needs to pay a further 40% of the income after he's paid Witholding Tax in CH (salary less witholding tax = HMRC taxable income).

Surely, this isn't correct? I'm not an accountant, which is why we've hired one (recommended on these boards).
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Old 07.06.2016, 15:12
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Re: HMRC UK tax on Swiss Income

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Apologies for not explaining properly, I've obviously confused others.

Some basic information. Husband took up a role in Zug, kids and I remained in the UK. Commuted backwards and forwards home/office. His ties to the UK are too strong to be considered non resident.

All salaried income has been taxed at source and is referred to as Witholding Tax by employer and Swiss accountant.

Sorting out HMRC returns, and the UK accountant states he needs to pay a further 40% of the income after he's paid Witholding Tax in CH (salary less witholding tax = HMRC taxable income).

Surely, this isn't correct? I'm not an accountant, which is why we've hired one (recommended on these boards).
Ary you saying the 3rd automatic overseas test does not apply?

Third automatic overseas test
1.7 You work full-time overseas over the tax year, without any significant breaks during the tax year from overseas work, and:
 you spend fewer than 91 days in the UK in the tax year
 the number of days in the tax year on which you work for more than 3
hours in the UK is less than 31

Bear in mind that the salary for UK tax purposes will be higher as only the 2nd Pillar is tax deductible, no travel, medical insurance, training etc.

The UK accountant would be correct, however not the entire income is taxable at 40%
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