Undeclared assets in the UK as non-resident

[Neo29]

Hello there.
I am an EU citizen who previously lived and worked in the UK for 10 years before leaving there about 6 years ago to move to South Africa. I registered as non-resident and clearly do not have sufficient ties to be considered resident. I do however have a bank account, EMIs and investments (>£400K) in the UK, and maintain an address there at my partner's parents residence. So I'm effectively using the UK as my proxy residence.
My question is about what happens if HMRC looks into my affairs and sees that I have assets in the UK that I'm not declaring. It should be easy to demonstrate I am not resident in the UK but are they likely to start asking for a tax certificate from my current country of residence?
I have not sold my investments to haven't made any capital gains on them but want to know if I am at risk of my assets getting frozen or ending up in trouble with HMRC.
Thanks in advance for your guidance!

 

[wellington]

There's no issues here....

As a non resident British subject i only have taxes based on capital gains (only effects property) in the UK .

I also don't have to report anything, so nor should you.

But there is a online calculator on HMRC you can use to determine easily enough.

The UK isn’t like EU countries just a point of note

 

[Larin]

UK has very clear (mostly days) based rules regarding tax residency. If you are not tax resident according to the rules you have no liability to pay tax on your income/assets, only on certain types such as UK based property as @wellington mentioned.

If HMRC comes looks you just need to show them that you do not fit the criteria for tax residency and that should be enough. Just to clarify, a TRC would only be needed if both countries consider you a tax resident and you are trying to make use of the double Taxation treaty between them. Doesn't sound like it applies to tour case.

 

[Martin Everson]

Hello there.
I am an EU citizen who previously lived and worked in the UK for 10 years before leaving there about 6 years ago to move to South Africa. I registered as non-resident and clearly do not have sufficient ties to be considered resident. I do however have a bank account, EMIs and investments (>£400K) in the UK, and maintain an address there at my partner's parents residence. So I'm effectively using the UK as my proxy residence.

Have I understood this correctly that you moved to South Africa and want to avoid SARS knowing about your assets in UK by keeping UK address on your accounts? And assets in UK are registered to your UK address and you have not informed HMRC either? Why have you not updated the address details in any case?

My question is about what happens if HMRC looks into my affairs and sees that I have assets in the UK that I'm not declaring. It should be easy to demonstrate I am not resident in the UK but are they likely to start asking for a tax certificate from my current country of residence?

You will know your time is up when HMRC sends you a tax return at UK address to complete. It often comes with a friendly letter asking if you forgot to complete your tax return. I never got asked for any tax certifiates when HMRC looked for me years after left UK and forgot to change address on some accounts. HMRC do it very sutterly like I said with a gentle reminder and daily fines along the way for each day you don't complete the form. I discussed this in another thread what happened to me.

I have not sold my investments to haven't made any capital gains on them but want to know if I am at risk of my assets getting frozen or ending up in trouble with HMRC.

Unrealized gains are not taxed. But one needs to look more into the type of investments themselves to be sure its just capital gains. For example tax is owed on non-distributing accumulation funds. But some wrongly think they only have to worry about paying capital gains taxes if they make a realised gain on the sale such funds sadly.

 

[Neo29]

Have I understood this correctly that you moved to South Africa and want to avoid SARS knowing about your assets in UK by keeping UK address on your accounts? And assets in UK are registered to your UK address and you have not informed HMRC either? Why have you not updated the address details in any case?

Correct. Although I did update my address to RSA with HMRC (to make it clear I've left the country) but I have not let SARS know I have assets in the UK. All my accounts are registered to my UK address.

You will know your time is up when HMRC sends you a tax return at UK address to complete. It often comes with a friendly letter asking if you forgot to complete your tax return. I never got asked for any tax certifiates when HMRC looked for me years after left UK and forgot to change address on some accounts. HMRC do it very sutterly like I said with a gentle reminder and daily fines along the way for each day you don't complete the form. I discussed this in another thread what happened to me.

I'd happily submit a tax return to HMRC on request, which would show I am not tax resident in the UK and don't have any tax liabilities. My concern would be more whether HMRC would want to see my RSA tax returns showing I've paid sufficient tax there. Pls share the link as I'd be interested to hear more, thanks

 

[Martin Everson]

I'd happily submit a tax return to HMRC on request, which would show I am not tax resident in the UK and don't have any tax liabilities. My concern would be more whether HMRC would want to see my RSA tax returns showing I've paid sufficient tax there.

They will not ask anything about your ZA life, tax returns, tax Certs etc unless your under investigation which is not likely. Remember HMRC pursue cases where taxes is likely owed in your case sounds like there is none.

However if HMRC sends you a tax return if your not living the UK then you can just call the HMRC hotline and tell them this and they will cancel the return. However after a certain amount of time (I forget how long) if you don't call then you have to complete the return plus you be getting the daily fine like I did. In such a case HMRC will need your new address abroad to keep on record, to mail you any refunds, communication etc. At this point with HMRC having your new ZA residency details anything can happen especially if they see £400k of invested assets.

Pls share the link as I'd be interested to hear more, thanks

https://www.offshorecorptalk.com/threads/newbie-crs-questions-uk.25480/post-92973

 

[wellington]

Wasn't aware of this, i never bothered to inform HMRC (wasn't a requirement a decade + ago) to the best of my knowledge.

Thanks for the information, mind i did get a rebate from them a year or so after when i realised they owed me.

 

[Steve3000]

Hello there.
I am an EU citizen who previously lived and worked in the UK for 10 years before leaving there about 6 years ago to move to South Africa. I registered as non-resident and clearly do not have sufficient ties to be considered resident. I do however have a bank account, EMIs and investments (>£400K) in the UK, and maintain an address there at my partner's parents residence. So I'm effectively using the UK as my proxy residence.
My question is about what happens if HMRC looks into my affairs and sees that I have assets in the UK that I'm not declaring. It should be easy to demonstrate I am not resident in the UK but are they likely to start asking for a tax certificate from my current country of residence?
I have not sold my investments to haven't made any capital gains on them but want to know if I am at risk of my assets getting frozen or ending up in trouble with HMRC.
Thanks in advance for your guidance!

If investments held in an ISA, you don't have to worry about. But could you simply continue to declare your assets in the UK, using your UK address? UK residency is not as strict as other countries. They don't usually care as long as the counci tax is being paid. The important thing is tax residency. BUT, you have to decide where you're going to be over the next 10+ years. At 400K, I doubt that your assets will be frozen by the HMRC. Otherwise, lots of famous people would be planning a revolution! PS You need some professional advice from a SA tax expert. But PLEASE, try to maintain an address in the UK. Have Amazon deliver there, Bank statements? magazine subscriptions etc. Keep proof of a UK address!