What Counts As Living Abroad ?

Discussion in 'Motorhome Chat' started by Yorick, Sep 25, 2015.

  1. Yorick

    Yorick Funster

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    I know there are a lot on here who spend most of the year in the sun, so hoping for some help please :)

    We are just about to rent our house out and 'move' to a smaller house we own. Then have some fun in the sun.

    But the letting agent say they have to take 20% of the rent in tax :(

    The Govt website is a bit ambiguous :(

    It mentions spending 6 months out of the country and also having a usual place to live abroad.

    We'll be heading off in November, so we've already lived the 6 months. And we'll be in the camper.
    So do these 2 factors count ?

    After the first tax year, it may not be as simple

    Any other ways to get round estate agent taking this tax (nothing illegal)

    And if they do indeed take this tax off, can we claim it back later as assume we'll have the usual £10k tax allowance

    All help appreciated
     
  2. Wildbill

    Wildbill Funster

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    what count's as living abroad any where south of Watford gap :rofl:
    bill
     
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  3. mariner

    mariner Funster Life Member

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    They only have to take the tax if you are living abroad, which you don't appear to be, as you have a UK address.
    Spending the winter in the sun does not constitute living abroad!

    You will have to pay tax some time though, so you need to register for self assessment, if you haven't already done so.

    :cooler:
     
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  4. Billy23

    Billy23 Funster

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    Correct!(y)
     
  5. Hollyberry

    Hollyberry Funster

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    They say they have to take 20% tax off at source--- they don't. You complete a form and you then declare rent as income in usual way. If you rent through an agent they are made to act as unpaid tax collectors unless you've completed said form ( I can find source for it if you want.)
    Do be aware that although you may register for taxes in another country the auK tax will send you a return to be completed because you let property here. I didnt receive the tax return they sent to me in France as I'd already left but didn't yet have a UK address. Fined £100 :(
     
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  6. John Laidler

    John Laidler Funster

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    I would speak to an accountant who can advise on all matters about taxes when planning to be outside the UK as you are. I can give you details of mine, he is in Devon but I guess it could all be done over the phone. He's honest and knowledgeable - which not all of them are!
     
    Last edited: Sep 25, 2015
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  7. fastpat

    fastpat Read Only Funster

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    I certainly would not be trusting a letting agent to deduct the 20% "tax" you owe, how do they know what other income you have? The tax due might be 40%, what expenditure are they allowing you to offset against any tax liability?

    And if they go bust and fail to pass the 20% on you will still have the liability.

    Having rented out properties in the past through agents and had our fingers burned I would tread very carefully, search the landlord forums and find an agent by recommendation.
     
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  8. gus-lopez

    gus-lopez Funster

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    The letting agent has no choice but to deduct it or refuse to let the place.

    Non-Resident Landlords
    If you live abroad for six months or more and choose to let out your UK home or investment properties, you pay income tax on the rent in the normal way, but there are special rules about how you pay the tax.

    Your letting agent or tenant must deduct tax from your rental profits at the basic-rate (20% currently) each quarter and pay it to HMRC (though tenants who pay rent that’s less than £100 a week don’t have to do this unless HMRC asks them to). You can then set off the tax paid against your tax bill when you complete your tax return.

    Alternatively, you can apply to HMRC for approval to receive your rental profits with no tax deducted. In return, HMRC will ask you to complete a self-assessment tax return once a year to work out whether any tax is due.

    See http://www.hmrc.gov.uk/cnr/nr_landlords.htm for full details of the NRL Scheme. Temples will be pleased to help you to complete the NRL forms and submit these to HMRC on your behalf.



    As to other factors. Once you are out of the UK for 3 months or you leave the UK KNOWING that you will be out for 3 months you have no entitlement to healthcare or an EHIC & if knowing should have informed your doctor to be removed from the list.

    Owning a house, paying, council tax, income tax , national insurance contributions gives no entitlement to healthcare in the UK. Only living their & classed as a "resident" does.

    http://webarchive.nationalarchives....dcharges/OverseasVisitors/Browsable/DH_074384

    This shows it for a state pensioner. If you are under retiring age & out over 3 months you have no entitlement.

    If you spend over 30 days in many EU states then you are required to register as a resident .Here in Spain it is a registration on the " foreigners registration list ".
    failing to apply to register is an offence with a 300€ fine. If you apply & cannot meet the criteria then you cannot be fined as you have applied, but additionally you also cannot be thrown out , but you have entitlement to nothing from the state.
    I would assume that there is a reciprocal agreement between UK & Canaries as even to Spaniards the Canaries are not part of the EU. Similar to Gibraltar to the UK
     
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  9. Flamenca

    Flamenca Funster Life Member

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    I have not had any difficulties in this respect. DO NOT tell the agent you will be living abroad. They do not need to know your life story. Simply say that you will be away from time to time on various trips. Provided that you complete your annual self-assessment declaring the rental income (less outgoings) you should not have any problems.
     
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  10. mariner

    mariner Funster Life Member

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    As far as I'm aware You are only required to register in Spain if you plan to work or claim benefits. If you are self supporting you need not apply for residency .
    You should normally not stay in any EU country more than 183 days in any 12 months.
    Not sure where the 30 days comes in, that's a new one on me and I have spent up to 6 months each year in Spain for the last 9 years.


    :cooler:
     
  11. Yorick

    Yorick Funster

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    Thanks all :)
     
  12. gus-lopez

    gus-lopez Funster

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    No You are required to register as a resident once here over 90 days regardless of being a tourist, self-supporting, working looking for work ,whatever.
    The offence is failing to APPLY to register. You can apply, fail to meet the requirements, healthcare, money ,etc; & you still cannot be thrown out /asked to leave /deported.
    The EU legislation is quite clear & applies to all EU states. The requirement for registration on a foreigners list is up to each state. Spain ,along with Greece chooses to insist on it. ANY stay over 90 days you are required to register as a resident. This is 90 CONSECUTIVE days for residency registration. If you lave after 89 days for 1 day then the clock starts again.

    If you know BEFORE entering that you will be there over 90 days then you only have 30 days in which to register.:) ( you all keeping up at the back there ?):LOL:
    This is the same as de-registering at your UK doctors as you'll be out more than 3 months . Only the legal , decent honest & truthful do it & then wish they shot themselves instead.:giggle:

    183 days CUMULATIVE in any calendar year makes you liable for tax residency.
    You can actually be tax resident , without actually being a resident & resident without being a tax resident.


    You should be very wary now the UK is doing " advanced passenger exit " checks on the tunnel/ferries as it will be easy for them to just cut peoples entitlements off once out over the prescribed time . Additionally you don't also want to be made to register here , even inadvertently as that would open you up to the nightmare situation of becoming a non-resident BriT; by virtue of the fact that you cannot be a resident at the same time in 2 EU states.
    Any registration as resident in another state also carries large amounts of unexpected consequences.
     
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  13. mariner

    mariner Funster Life Member

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    But I am not residing in Spain I have no residential address and therefore have no need to register.


    :cooler:
     
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  14. Judge Mental

    Judge Mental Funster Deceased RIP

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    Exactly..Change the agent and stay stum PDQ

    There are many staying in Spain for many years living on campsites that don't register...Some I have spoken to for 17 years and the like.
     
  15. Jonkil

    Jonkil Funster

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    Don't break the law.
    But bend the bejesus outa it ;)
     
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  16. Minxy Girl

    Minxy Girl Funster Life Member

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    It may not be that easy - usually if you are out of the UK for any length of time the agents will charge you a higher commission rate probably due to their having to do more/spend more time on sorting stuff for you as you're not here to do it, or if they need to get in touch etc.
     
  17. Charlie

    Charlie Funster

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    When has a letting agent ever deducted tax from a client ? It's down to each individual to declare all income. All allowances will be offset against all income. Plus any expenses on the property are submitted and you will not pay tax on money spent in this respect.
     
  18. OldAgeTravellers

    OldAgeTravellers Funster Life Member

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    the easiest way is to open a limited company for letting. You will have to lend the company the money to buy the properties from you which will incur some stamp duty possibly, but it then means that any money you take out is a repayment of that loan.The company is legally resident in the UK doesn't matter where the Directors are living once the company is started. The company address is usually your accountant's.
    Other benefits are that you can pay all of the company profits into your Sipp if you have other income that is.
    You have to pay tax on profits but the company doesn't have to make any. You will have to run a PAYE scheme for the directors because that is now done in real time it can be a bit of a problem. Depends how much income you have it may be best to get a good agent who is unlikely to go bust and let them deduct the tax. Any over payment you claim back at the end of the year.
     
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  19. mariner

    mariner Funster Life Member

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    Under certain circumstances such as the landlord being resident abroad they have to deduct 20% by law and if you rent direct and the rent is over £100 per week, the tenant has to deduct 20% and submit it to the HMRC.

    :cooler:
     
  20. Charlie

    Charlie Funster

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    For a letting agent to deduct tax has quite some implications. For a Tenant to deduct has even more implications.
    Who stumps up if the tenant does a runner ?
    The liability to pay tax lies with the property owner and is usually done though his or her accountant. Few sensible astute people do not use an accountant.

    Perhaps you can provide a link to the legislation ? As a person with a small portfolio of rented out properties this is interesting...
     
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