Expats can beat the UK taxman by keeping travel logs

Published:  23 Dec at 6 PM
Want to get involved? Become a Featured Expat and take our interview.
Become a Local Expert and contribute articles.
Get in touch today!
As most UK expats are aware, expat tax liabilities depend on whether an individual is deemed to still be domiciled in Britain, thus giving tax residency status.

Under British tax rules, all personal or financial ties to the UK must be broken in order not to be considered tax resident. If this is the case, expats are forced to pay UK tax on their chargeable gains and income over and above their personal tax threshold.

The law does not have to take into account any amount of time spent overseas, but relates only to the relationship between the UK and the potential taxpayer. Several recent court cases brought by HMRC were decided on the basis of the taxpayers’ ability to prove non-residence.

Two contrasting cases may have given genuine non-residents a way out, with the first concerning a couple who had lived abroad for 10 years and occasionally returned to the UK, but had no record of their travel movements. Their omission cost them some £600,000.

The defendant in the second case had kept detailed records exactly recording the times and dates of visits both to the UK and to other countries. HMRC lost the case and the defendant was spared a £5.5 million capital gains tax bill.

According to tax advisors, expats are now being told to log details of all trips, keep copies of dated airline tickets, copies of passport stamps when entering other countries and note the times and dates of their arrivals in and departures from the UK. Reasons for the visit and hotel addresses as well as payment receipts should also be part of the log.

Keeping exact records will become even more important after April 2014 when capital gains tax rules relating to non-residents are due for an unwelcome change. It may be trying to be forced to prove your innocence, but it’s far cheaper than paying up.
Like this news?

Comments » No published comments just yet for this article...

Feel free to have your say on this item. Go on... be the first!

Tell us Your Thoughts On This Piece:

Your Name *
Email * (not published, needs verification one time only)
  • Facebook
  • Follow us on Twitter
  • RSS feed
  • Facebook

Latest Headlines

News Links

News Archive