Have you recently moved abroad and become an expat? This can be an exciting journey and one that is good for you personally and financially. But one thing you have to make sure that you are knowledgeable about is tax. Moving to a different country means that you have a lot of new responsibilities. In particular, making sure that you pay enough tax and ensuring it is on time is essential. Governments are getting stricter when it comes to expats and now is the time to start tax planning. Here are some things that you need to know.
Consider Your Status
First of all, you need to work out if you are a UK resident or an expat for the purpose of tax. Of course, your obligations are going to be different based on the answer to this question. For example, if you are in the UK for 183 days or more during the year, you will be liable for British tax. It will not matter where you earned this money and you will have to pay UK tax even if you worked abroad. If you are an expat, you are only going to be expected to pay UK tax on anything that you have earned inside the country.
Learn Local Rates
Make sure that you know what the local rates are where you are residing. You must make sure that you fulfil your obligations so that you do not get into trouble. Of course, just because you are working in another country, does not mean that you are automatically exempt from taxation in your home country. Again, this will depend on your status. But you may also have a tax-free personal allowance and you want to make sure that you learn more about that.
Consider a Pension
If you want to find ways that you can cut down on the amount of tax you pay as an expat, consider starting a pension. For example, a QROPS Pension can be very beneficial for expats and mean that you pay less in tax and even in inheritance tax.
Seek Financial Advice
Expat tax planning is not easy. Do not be afraid to ask for help when it is necessary. This is going to be better than making a mistake when it comes to your tax liability and having to pay out more money or penalties. Advice from a qualified expert is going to offer you peace of mind and allow you to be tax efficient when you are an expat. For example, TailorMade Pensions can help you when it comes to financial advice living abroad.
Know If There is a Double Tax Treaty
A double tax treaty is made so that you do not have to pay double on tax between two countries. Therefore, check if one exists for your home country and where you are currently living. This can be a good thing to know if you considering becoming an expat and want to know where to go to avoid paying lots of tax.