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uk remittance basis

Ruy

New member
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

Offshore Retiree
Mentor Group Gold
Elite Member
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.
 
Last edited:

Ruy

New member
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

Offshore Retiree
Mentor Group Gold
Elite Member
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.
 
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