High incomes and moving abroad
The changing tax landscape in the UK: high earners and the exodus abroad
Introduction
In recent years, the UK has seen a significant change in its tax landscape. There are now 2.8 million more taxpayers compared to 2010. This change has concentrated the tax burden on a smaller segment of the population, with more than 60% of income tax being paid by the top 10%. richest incomes. As a result, many high-income earners are exploring options to mitigate their tax obligations, including the possibility of relocating overseas.
The appeal of moving abroad: Popular destinations of choice
Faced with increasing tax pressures and high tax rates, many UK residents are considering moving to countries with more favorable tax regimes. Thailand and Portugal have become popular destinations for those seeking a better quality of life and potential tax benefits.
Thailand offers a low cost of living, beautiful scenery and a relatively lenient tax system. The country’s non-resident status and foreign income exemption rules make it an attractive option for retirees and remote workers.
Portugal, through its non-habitual resident regime (NHR), offers significant tax incentives to new residents. Its favorable climate, security and high standard of living further strengthen its appeal.
Navigating the Tax Implications with ETC Tax
However, moving abroad carries complex tax implications that require careful consideration. A crucial aspect is the assessment of residency status, as individuals may face treatment over a split year. This would mean that the tax year would be split into a resident period and a non-resident period, which would have a significant impact on how an individual’s income is taxed.
ETC Tax can help its clients meet these challenges by:
Determining UK tax residency status:
We can help you review HMRC’s statutory residence test to determine whether you are considered a resident or non-resident of the UK for tax purposes. This can help you be sure you are paying the correct amount of tax for the year when complex residency considerations arise.
Treatment over two years:
Advise on the rules and implications of split year treatment, ensuring that your income is correctly taxed in the tax year in question.
Tax planning:
Provide personalized advice on how to structure your affairs to take full advantage of the tax advantages of your new country of residence.
Compliance and reporting:
Ensure that all tax obligations are met in the UK and contribute to their achievement. We are happy to help you with all or part of the process. We are flexible in terms of support level.
Next steps
Moving abroad can offer significant tax benefits, but it requires expert advice to navigate the complexities of international tax law. ETC Tax is here to help you every step of the way, ensuring a smooth transition and optimal tax results. Please contact us at [email protected] if you would like to find out more.
