“ You certainly shouldn’t move just for tax purposes. For us, lifestyle was the primary motive.”
clients who have made a long-term move successfully, as well as others who have had to return home – usually because of personal illness or family problems.
She says interest in moving abroad is growing, particularly among those approaching retirement. She warns that to enjoy the full tax benefits of any move you have to make a commitment to making a reasonable break with the UK.
“You’re going to have to give up many of your connections with the UK. You might not see your family as much, and if you have children there are the issues of schooling. It’s seldom sufficient to move abroad simply because you want to reduce your tax bill.
“It works best if you’re fulfilling that long-held dream and if your spouse and dependants share the dream. It can cause serious tensions if you want to move to France for the wine and your wife just wants to be at home with your grandchildren!”
Isabelle believes the most successful moves share similar characteristics. “The people who make the transition most comfortably are people who’ve grown to
Thinking of moving abroad? Isabelle Mulroy offers some guidance
A new statutory residency test will be introduced in April 2013. This general advice applies until then. Of course, you should take professional advice in the UK and in the country you are planning to move to.
Counting the days
Contrary to popular opinion, spending fewer than 183 days in the UK in a tax year is not enough to qualify for UK non-resident status. You need to show that you have left permanently or that you are working full-time abroad for at least a complete tax year.
Clean break Proving you have left permanently (or for at least three years) requires you to show a clean break from the UK. HMRC does not define how to do this. It will look at factors like why you have left, what visits you have made to the UK after you have left and what connections (such as business, property and social) you keep in the UK.
Working abroad If you are working abroad, do little substantive work in the UK and can prove you spend fewer than 91 days a year here you can claim non-residency, even if your family remain in the UK.
For detailed guidance on how the rules on residency are likely to change next April, visit www.hm-treasury.gov.uk
Isabelle Mulroy is Deutsche Bank Private Wealth Management UK’s Head of International Wealth Planning