Expatriate taxes

If you work overseas, or spend a lot of time abroad, you may benefit from advice about reducing the amount of tax you pay in the UK.

An expatriate (or expat), is someone who temporarily or permanently lives in a country other than that of their upbringing or legal residence. If you fall into this category, then you could take advantage of the differences in taxation that exist in the country where you’re staying. But it’s important to make sure you also pay any tax due in the UK.

For expat tax purposes, a lot depends on how much time you spend out of the country. If you weren’t born in the country that you’re living in, or you don’t consider it to be your permanent home, then you’re considered to be a ‘non-domicile’ resident. And if a non-domiciled UK resident is employed by a non-UK resident employer and performs all of their duties outside of the UK, the income arising is only subject to UK tax if it is received or remitted to the UK.

As you can see, expat taxes aren’t straightforward! They’re a bit more complicated than the ‘domestic’ taxes that most people have to pay. But there are advantages to keeping money earned overseas in offshore investments. Some increases in growth are taxed at lower rates than the UK. Money that’s saved or invested in a financial product that’s managed by a company based outside the UK is known as offshore investing. Taxation of offshore investments very much depends on where your money is invested, and those all-important personal circumstances.

In both cases, as an investor or if you’re paying tax on overseas income, it’s a good idea to get advice on your tax position from an independent financial adviser (IFA). Expatriate tax advice is a specialist area, so it’s also best to choose an IFA who’s aware of the tax legislation in the country you’re living.