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  #21  
Old 01.08.2011, 17:08
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Re: Tax and residency in Geneva, France and UK

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I had a discussion with a friend who is a solicitor today (specialising in trusts, probate, etc, and also residency as it relates to her clients) and he told me that the law in the UK is changing and the 90 days rule will become a more definitive test of residency in UK, such that severing ties will not be necessary if you do not exceed 90 days. This has not yet been enacted but if I get a reliable source of further info I will post it here.

He also suggested that advice on the OP's position could be obtained from either a lawyer or an accountant but it has to be one that specialises in this area and there is no definitive qualification that indicates this. In theory a lawyer that in STEP qualified (trusts and estates) should be the best bet though.

It would seem rather unlikely after the revenue persued Robert Gains-Cooper for over 10 years before winnng in the court of appeal. His defence was based on the revenues guidelines on the 90 day rule & lost.
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  #22  
Old 01.08.2011, 17:20
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Re: Tax and residency in Geneva, France and UK

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David Franks: Fellow of the Institute of Chartered Accountants in England & Wales as well as a member of the Society of Trust and Estate Practitioners.

I have no association with this firm except a short tax-planning conversation a few years ago.
David Franks does indeed seem to be qualified, if the person you spoke to was either a Chartered Accountant, Certified accountant, Solicitor or even Barrister, then he too would be adequately qualified.

Of course if you just had a conversation & no advice was given then he would not need to be qualified.

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Old 01.08.2011, 17:23
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It would seem rather unlikely after the revenue persued Robert Gains-Cooper for over 10 years before winnng in the court of appeal. His defence was based on the revenues guidelines on the 90 day rule & lost.
Apparently that high profile case had a lot to do with revisiting the rules. But as I said, I am only reporting back from a person who is far more expert than I am and I have asked for further info about it. Not much point speculating how likely it is until there is actually some evidence one way or the other. My intention in posting about the conversation was to highlight that rules are constantly changing and the OP (as well as many people here) need up to date advice.
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  #24  
Old 01.08.2011, 17:26
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Re: Tax and residency in Geneva, France and UK

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  #25  
Old 01.08.2011, 17:32
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Re: Tax and residency in Geneva, France and UK

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Thanks to your help, fatmanfilms and Village Idiot, I have been advised that UK tax will definitely not apply to my husband's estate, but will almost certainly apply to mine.
As your husband is 'a non dom' if you were to move to the UK he would only be taxed on INCOME remitted to the UK, not world wide income & gains. This would apply for the first 7 years. Any amount of capital could be remitted free of any tax.

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  #26  
Old 01.08.2011, 17:34
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Re: Tax and residency in Geneva, France and UK

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Apparently that high profile case had a lot to do with revisiting the rules. But as I said, I am only reporting back from a person who is far more expert than I am and I have asked for further info about it. Not much point speculating how likely it is until there is actually some evidence one way or the other. My intention in posting about the conversation was to highlight that rules are constantly changing and the OP (as well as many people here) need up to date advice.
If only the UK's legal system was as easy as that!
2 Brittish Airways long haul pilots have also lost in court with the revenue recently.
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Old 01.08.2011, 17:38
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Re: Tax and residency in Geneva, France and UK

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As your husband is 'a non dom' if you were to move to the UK he would only be taxed on INCOME remitted to the UK, not world wide income & gains. This would apply for the first 7 years. Any amount of capital could be remitted free of any tax.

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As the old boy is 84, I think he'd be happy if he could be guaranteed another 7 years whatever the tax situation
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  #28  
Old 01.08.2011, 17:47
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Re: Tax and residency in Geneva, France and UK

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If only the UK's legal system was as easy as that!
2 Brittish Airways long haul pilots have also lost in court with the revenue recently.
As easy as what? I don't understand your point. I'm reporting from an expert participant that there may be changes in the future. You are talking about things that have happened in the past.
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  #29  
Old 01.08.2011, 18:08
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Re: Tax and residency in Geneva, France and UK

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As easy as what? I don't understand your point. I'm reporting from an expert participant that there may be changes in the future. You are talking about things that have happened in the past.
British tax law is not as simple as rules, it's how the law is interpreted, often the only soloution is Litigation.

The revenue was in dispute with all Goldman Sachs patners who lived in the UK over the base valuation of their patneship share at floatation. The revenue refused to accept their valuation, however did not suggest another figure. After more than 10 years the revenue backed down on condition that every patner agreed not to litigate, they realised they might loose & have to repay tax paid. Having open tax years for 10 years is a very serious situation as any underpaid tax needs to be paid with compound interest,
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  #30  
Old 01.08.2011, 19:11
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Re: Tax and residency in Geneva, France and UK

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British tax law is not as simple as rules, it's how the law is interpreted, often the only soloution is Litigation.

The revenue was in dispute with all Goldman Sachs patners who lived in the UK over the base valuation of their patneship share at floatation. The revenue refused to accept their valuation, however did not suggest another figure. After more than 10 years the revenue backed down on condition that every patner agreed not to litigate, they realised they might loose & have to repay tax paid. Having open tax years for 10 years is a very serious situation as any underpaid tax needs to be paid with compound interest,
You're still talking about examples from the past which have no bearing on changes that might happen in the future, and now are not even related to the issue in question (residency). Some tax legislation is straightforward, some is not. Personally, I would welcome any modernisation or clarification of the existing framework, if or when it ever happens.

I think this tangent from the original question has run it's course now (I, at least, am slightly regretting starting it!).
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Old 01.08.2011, 20:56
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Re: Tax and residency in Geneva, France and UK

Thanks everyone for your help - I really am new to this world of international taxes.

I had assumed that because I will be taxed in Geneva at source I would not be taxed also in the UK (because of the anti-double taxation provisions - whatever my residency status).

But if I understand you all correctly you are telling me that even though I will be taxed on my Geneva income at source in Geneva (at approx 17.5%) - if I am UK resident I would also need to pay any extra - if under UK tax rates I would owe more (and since my Geneva income will be the SF equivalent of 90,000 it is likely that I would owe more in the UK. Is that correct?

I had read somewhere that if my Swiss income was at least 90% of my total income I would not be required to pay any tax anywhere else - but does that only apply to France?
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  #32  
Old 01.08.2011, 20:57
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Tax law is based on 100's of years of court cases , I don't see the legal system in the uk changing in my life time.
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  #33  
Old 02.08.2011, 12:05
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Re: Tax and residency in Geneva, France and UK

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I had a discussion with a friend who is a solicitor today (specialising in trusts, probate, etc, and also residency as it relates to her clients) and he told me that the law in the UK is changing and the 90 days rule will become a more definitive test of residency in UK, such that severing ties will not be necessary if you do not exceed 90 days. This has not yet been enacted but if I get a reliable source of further info I will post it here.
Here is a link to some further information on proposed changes to the definition of residency in the UK for individuals. It is currently at the consultation stage.

http://www.hm-treasury.gov.uk/consul...dence_test.htm

To quote the purpose of this review:

"The current rules that determine tax residence for individuals are complicated and unclear. At Budget 2011 the Government announced that it would introduce a statutory definition of tax residence. Its aim is to create clear rules that provide greater certainty for taxpayers and are simple to use."

I have not read the lengthy document in full yet, but I imagine it will be very interesting reading for many of us here. On page 5 it states that one of the proposed conditions that will conclusively determine if an individual is non-resident in the UK for a particular tax year is:

"- leave the UK to carry out full-time work abroad, provided they are present in the UK for fewer than 90 days in the tax year and no more than 20 days are spent working in the UK in the tax year."

There is also an online tool that you can use to test whether you will be considered a resident or non-resident on the proposed rules. Note that this does not indicate your current residency status as it is only at consultation stage. In the opinion of a friend of mine who is a specialist in this area there is nothing controversial here and the new rules are likely to be approved for future use.

Please note that I am not a tax specialist and am providing this link for info only.
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  #34  
Old 02.08.2011, 12:26
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Re: Tax and residency in Geneva, France and UK

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Tax law is based on 100's of years of court cases , I don't see the legal system in the uk changing in my life time.
Tax rules change all the time. At every UK budget for example. The double taxation treaty between the UK and Switzerland was signed in 1977 and the latest version as recently as 2010.

I think you are confusing the structure of the legal system with the sources of tax rules. All tax systems are based on domestic legislation at a central or local level (or both), and in some countries the legislation is very detailed and specific while in others it is less detailed and supplemented by case law. In addition, supranational bodies such as the EU and international tax treaties provide other sources of tax rules and these may be more or less detailed than rules based on the domestic legislation.

The UK legal system is based on case law, as you say, however this does not mean that there are no specific tax rules nor that legal precedents on tax issues are set in stone. The link I have provided above to the consultation on residency status is an example of this. HM Treasury even has a working group whose specific task is to provide advice to the government on simplifying the UK tax system:

http://www.hm-treasury.gov.uk/ots.htm
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Old 02.08.2011, 12:33
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Re: Tax and residency in Geneva, France and UK

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But if I understand you all correctly you are telling me that even though I will be taxed on my Geneva income at source in Geneva (at approx 17.5%) - if I am UK resident I would also need to pay any extra - if under UK tax rates I would owe more (and since my Geneva income will be the SF equivalent of 90,000 it is likely that I would owe more in the UK. Is that correct?
In principle yes that is the case at present if you remained a UK resident. The consultation document on residency rules is a very accessible read for the lay person and will give you an overview of the current situation as well as possible future changes. HM Treasury is inviting comments from individuals as well as other interested parties until 9th September 2011 so here is everyone's chance to share their views!

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I had read somewhere that if my Swiss income was at least 90% of my total income I would not be required to pay any tax anywhere else - but does that only apply to France?
I'm sorry I don't know anything about French tax and have not heard of the 90% rule. Sounds like it's worth looking into.
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  #36  
Old 02.08.2011, 12:41
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Re: Tax and residency in Geneva, France and UK

Have a look at this site -- you might find it helpful:

http://www.direct.gov.uk/en/MoneyTax...UK/DG_10027480

This section deals specifically with income from employment:

http://www.direct.gov.uk/en/MoneyTax...UK/DG_10026136

As you can see, a great deal depends on your residency status. It's worth seeking out specialist advice if you're in any doubt.

Some more light reading, if you're having trouble sleeping:

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

And finally...

http://www.hmrc.gov.uk/helpsheets/hs302.pdf

Last edited by Village Idiot; 02.08.2011 at 13:28.
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Old 07.08.2011, 23:31
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Re: Tax and residency in Geneva, France and UK

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I had assumed that because I will be taxed in Geneva at source I would not be taxed also in the UK (because of the anti-double taxation provisions - whatever my residency status).

But if I understand you all correctly you are telling me that even though I will be taxed on my Geneva income at source in Geneva (at approx 17.5%) - if I am UK resident I would also need to pay any extra - if under UK tax rates I would owe more (and since my Geneva income will be the SF equivalent of 90,000 it is likely that I would owe more in the UK. Is that correct?

I had read somewhere that if my Swiss income was at least 90% of my total income I would not be required to pay any tax anywhere else - but does that only apply to France?
I'm also looking at this situation; as far as I can tell the situation in Switzerland is the same to Luxembourg, based on the double tax agreements between UK and LU/CH.
- as a UK tax resident, you are subject to tax on worldwide income
- but for income arising from employment in CH, paid by a CH resident employer, you are exempt from a second taxation in the UK
- I complete a UK tax return, and do not include my LU employment income in the income box. I put a note in the comment box stating "I received EUR xxx from employment in Luxembourg, paid by a Lux employer. Under the DTA this income is fully taxed in Lux and I claim exemption from taxation in UK"...no problems so far
- I'm probably anyway NOT tax resident in UK, since I left for full-time employment, but the rules were not clear enough based on my family situation, so I use the DTA route
- if the new UK tax residency criteria become final, then I will be 100% clear, and not UK tax-resident.

Note: I am not pretending to be a tax expert...only sharing my own experience
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  #38  
Old 08.08.2011, 20:04
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Re: Tax and residency in Geneva, France and UK

Hi,

Your incorrect, you are liable to UK tax, however you will get credit for any tax paid so far under DTA. The DTA is not an exemption from UK tax.

If the Revenue ever look at your self assessment return, they will recalculate your tax payable, add interest & possibly a fine.

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- but for income arising from employment in CH, paid by a CH resident employer, you are exempt from a second taxation in the UK
- I complete a UK tax return, and do not include my LU employment income in the income box. I put a note in the comment box stating "I received EUR xxx from employment in Luxembourg, paid by a Lux employer. Under the DTA this income is fully taxed in Lux and I claim exemption from taxation in UK"...no problems so far

Note: I am not pretending to be a tax expert...only sharing my own experience
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