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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have worked in solely Barbados since 1971 and have now at

Customer Question

I have worked in solely Barbados since 1971 and have now at 69 years old become "semi" retired.
I am thinking of spending more time back in Europe and UK and perhaps buying a property.
I have kept up my UK NIS payments over the years and now collect a UK and Barbados pension which supplements my remaining income here.
What do I need to be aware of tax wise if I spend around 4/5 months a year back in UK?
Submitted: 2 years ago.
Category: Tax
Customer: replied 2 years ago.
I have lived in Barbados since 1971 originally working here as an engineer for the Barbados Government on an Overseas Development Administration contract which was funded by the UK government. I then branched out setting up my own companies which have been reasonably successful.I intend to keep Barbados as my primary residence as my two sons who were born here live and work on the island however I find myself spending more time in Europe especially in the summer. My partner also lives in Scotland and I am contemplating buying a house with her and I also own a barge on the canals in France which I really enjoy.I became nonresident in UK many years ago and the only connection I kept was to continue paying my NIS on the advice from someone in a similar business to yourself. My hard earned savings have been accumulated after tax and being born in 1946 I am semi retired right now living mainly on my UK and Barbados pensions, income from savings/investments and a stipend from my holding company here.I believe Barbados has a double taxation treaty with UK?
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Firstly, when you left the UK did you send a Form P85 to the Inland Revenue as it was then? If not, you should complete one immediately, fortunately there is no time limit on its submission, it is available of the web and can be filed on line. On receipt HMRC will classify you as non resident fro the tax year after your date of departure and furthermore split the leaving year into two portions, one resident and the other non resident. As a non resident you may spend up to 91 days in the UK in any one tax year without risking your status. In theory the 91 days can be averaged over four tax years, but the general consensus amongst experts on this thread is never to exceed the magic 91 days. If you spend over 283 days in the UK in any tax year you are liable or UK taxation on your world wide income. There is a Double Taxation Treaty between the UK and Barbados which precludes the same income stream from being taxed in both jurisdictions. This is achieved by means of tax credits, the tax paid to one country being allowed as a tax credit against any liability in the other. The Treaty does not, however, protect you from differences in tax rates. I do hope my reply has been of assistance.
Customer: replied 2 years ago.
Hi Keith,
Thanks for your prompt reply which is very interesting. I did not fill out any forms as I recall as it was a long time ago. Obviously I completed the NIS form for non residents and paid those contributions annually.I do not have much "work income" these days but do have some savings in the bank and various assets, mainly property, in Barbados which I will be putting on the market as time goes on. This will give me some more capital after the taxes are paid on the sale and I should be able to live in Barbados and travel fairly comfortably with that. It was always my plan to finance my retirement by selling my investments that way.I would be grateful however if you clarify what happens if I use some of my savings to invest in a property in Scotland with my partner?Also if I did return for more than the allowed period and was classed as resident what tax is there on any capital i.e. "money" that I brought back with me?Kind regards,
Howard.
Expert:  bigduckontax replied 2 years ago.
Please submit a P85, Howard, you will find dealing with HMRC much easier. Watch out for the 91 day rule, though and don't breach it The capital you import will be outside the scope of UK taxation under the split year regime. You have been out of the UK over five years so your sale of investments will not attract Capital Gains Tax (CGT). If you invest in property in Scotland then any income you derive therefrom will be liable to UK Income Tax irrespective of your residential status. As an EEA citizen you retain your personal allowance, currently 10.6K pa to offset income.
Customer: replied 2 years ago.
Hi Keith,
What are differences between non resident and non domicile that will be pertinent in my case?
H.
Expert:  bigduckontax replied 2 years ago.
Domicile is effectively a dead duck in UK taxation these days.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.