uk remittance basis

[Ruy]

Hi,

I would be happy if anyone could help with this tax question.

I am resident but non-domiciled in the UK. By the remmitance rule, I am taxed on foreign investment income only up to the amount that I send back to the UK.

I would like to understand if this sequence I have i mind is feasible or if there is any key point I am missing:

1- Send my savings to an investment broker abroad (EU)
2- Open an international bank account, anything not based on UK.
3- Withdraw my investment income to this offshore account.
4- When having expenses abroad as a tourist, use the funds from this offshore account.

With these steps, would I be able to not pay taxes on the investment income without doing anything 'wrong'? Is there any pratical detail I am missing?

The remmitance rule also considers anything at all that you consume within the UK. I would suppose this excludes plane tickets from this consideration, is that correct?

Thanks a lot

 

[Martin Everson]

1- Send my savings to an investment broker abroad (EU)

Savings from outside the UK? From where?

2- Open an international bank account, anything not based on UK.

Nothing wrong here

3- Withdraw my investment income to this offshore account.

Nothing wrong here

4- When having expenses abroad as a tourist, use the funds from this offshore account.

Nothing wrong here

With these steps, would I be able to not pay taxes on the investment income without doing anything 'wrong'?

Yes

Is there any pratical detail I am missing?

Yes. If you invest in a UK situs asset from abroad it is considered a remittance and you will be taxed if they find out. For example if you buy a UK stock or fund in your offshore brokerage account. Also while you are resident in UK most brokers who have a UK operation will direct your account application to open an account internally to the UK entity even if you apply via their non-uk website. I think IB does that. So you need to check REALLY carefully where the investment account is actually based you are opening as a UK resident.

The remmitance rule also considers anything at all that you consume within the UK. I would suppose this excludes plane tickets from this consideration, is that correct?

If ticket payment is processed in UK with offshore money then its rightly a remittance. Pick a site that processes tickets outside the UK like in Luxembourg or Ireland for example.

 

[Ruy]

Thanks a lot Martin. I wasn't considering at all the possibility of brokers internally directing my application to the uk, that was really helpful.

I asked this considering small amounts to be used as tourism expenses. Would you think it is feasible to use this on a broader sense of not paying any tax from all my assets if I move residency to another country?

The UK and other European countries have remmitance rules saying that taxation is not applicable when bringing assets accumulated before the residency started.

If I eventually leave the UK and become a resident in another country with such rule, would it be feasible to say that I would be able to bring the assets on these offshore broker accounts to this new country without paying neither UK nor 'new country' taxes?

I know this would depend on the country rules and may vary depending on specifics but would you say this is a feasible route and people have successfully made it before or there is again some killer detail that would make it impossible in practice?

 

[Martin Everson]

Would you think it is feasible to use this on a broader sense of not paying any tax from all my assets if I move residency to another country?

Yes

If I eventually leave the UK and become a resident in another country with such rule, would it be feasible to say that I would be able to bring the assets on these offshore broker accounts to this new country without paying neither UK nor 'new country' taxes?

Money earned before you move to a new country is considered capital and not taxed in new country.

I know this would depend on the country rules and may vary depending on specifics but would you say this is a feasible route and people have successfully made it before or there is again some killer detail that would make it impossible in practice?

It's feasible as I did it already.