Avoiding HMRC after relocating to Europe post Brexit

Avoiding HMRC after relocating to Europe post Brexit

Avoiding HMRC after relocating to Europe post Brexit

Professionals in the financial sector planning to move to Europe pre-Brexit should do their legal best to avoid the long arm of HRMC.

Her Majesty’s Revenues and Customs is on the watch for financial experts moving to European cities from London City. Wealth planners and accountants are now reporting widespread confusion over UK tax liabilities for Britons planning on moving overseas in the fairly near future. Most are moving due to their firms’ plans to leave London before it’s too late. As well as affecting Brits, moves by HRMC may also hit on EU financial professionals who’ve lived and worked in London long-term and built up investment portfolios including stocks and properties.

Everyone who moves overseas, either for work or by personal choice needs to remember crossing a border doesn’t count as a clean break from UK taxes. Global banks including Morgan Stanley, Goldman Sachs, Citigroup, JP Morgan, BNP Paribas and others are all likely to relocate their operations to EU-based rival financial centres post-Brexit, taking with them hundreds of professionals, with a recent survey suggesting some 5,000 finance jobs will be involved. The most prevalent assumption regarding tax liabilities is that, once a move overseas is made, one is no longer UK-domiciled and therefore no longer answerable to the UK taxman, even as regards inheritance tax.

Those born in the UK are automatically classed as domiciled, as are those who’ve lived in Britain for 15 of the last 20 tax years. In addition to those considered domiciled, the tax code can also cause problems for those claiming non-residency whilst on secondment to an office overseas. Non-residents must pay tax on income earned in the UK, including rentals from a British buy-to-let property, but residency may well trigger taxation on overseas earnings as well as capital gains.

One way or another, it seems that, once HMRC has its claws in an individual, it won’t let go, as appeals against tax bills can go on for a very long time causing personal stress as well as possible financial disaster. For example, residency is triggered simply by staying in the UK for more than 90 days a year, or working in the UK during a visit on more than 30 of those days. Slamming the financial door on the way out can only be achieved safely by checking and double-checking your exact situation as well as taking professional advice.

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