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Rakhi Vasavada
Rakhi Vasavada, Financial Advisor
Category: Finance
Satisfied Customers: 1813
Experience:  Attorney and Financial Expert. Have specialization in Financial Laws.Practice experience of over 13 years
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I think I may need to access an accountant? I would like to

Customer Question

Hi I think I may need to access an accountant ? I would like to know if I can class myself as a UK resident if my work means I am outside the UK for most of the year, so although am not liable for UK tax on income paid into my UK account I can apply for a normal UK mortgage ? Thanks.
JA: Where are you? It matters because laws vary by location.
Customer: I work most of the year in Thailand for a Thai company. But I am also registered to vote and have a bank account in the UK, all registered at my parents house, where I reside when I am in the UK .
JA: What steps have you taken so far?
Customer: I have approached a few lenders, but it seems that while I can get the finance, it is at high rates, unsecured and I have been informed, albeit by specialist ex-pat brokers, that I must apply as an ex-pat .
JA: Anything else you want the lawyer to know before I connect you?
Customer: I have thought about setting up a UK company to purchase the property which would most likely be let out - is this of any benefit, or would it just mean that I pay tax on the UK company earnings ?
Submitted: 4 months ago.
Category: Finance
Expert:  Peter replied 4 months ago.

Hi, my name is ***** ***** I am a Chartered Tax Advisor.

For UK tax purposes tax residence depends on how many days you spend in the UK along with the ties you have to the UK; it is not something you can decide, however I will be happy to help you determine your position.

To start with, typically how many days do you spend in the UK each tax year? I will probably need to ask more questions but this is the starting point.

For the property, I assume you are planning to buy a UK residential property? Please would you advise whether you ever plan to live in this property or whether it will purely an investment/rental property

Kind regards, Peter

Customer: replied 4 months ago.
Hi Peter, it is not a set amount of days any particular year. Probably between 60 and 100 days ? I do plan to eventually live in the property, and spend more time in the UK, but at the moment it would be more of an investment to rent out, and I would reside at my parents house when in the UK. Although I would use it if it was free while I was in the UK .
Customer: replied 4 months ago.
Hi Peter. I should say that my UK bank account and credit card are registered to my parents address, and I am registered to vote from there as well.
Expert:  Peter replied 4 months ago.

Thanks.

If you ever plan to live in the property in future generally this would be a good reason to not use a company.

With 60-100 UK days you are in the bracket where you could either be tax resident or non-UK tax resident depending on the exact number and some other factors. Can you give any closer estimate for the current tax year (6 April 2019 to 5 April 2020)?

Residence is very complicated (as you will read!) so I have summarised the relevant bits for you below. The comments that follow are in reference to HMRC guidance on tax residence at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf.

On page 10 paragraphs 1.7 and 1.10 - in the current tax year (6 April 2019 to 5 April 2020) will you meet the Third automatic overseas test? If you do, you will be non-UK resident.

I assume you would currently regard your parent's home as your own home (or one of your homes) but please let me know if not.

Starting from page 30 - please assess which of the ties you meet out of the family, accommodation, work, 90 day and country ties, and let me know.

Please can you confirm the month and year you left the UK to live abroad?

If you have any queries please let me know. I look forward to hearing from you.

Kind regards, Peter

Expert:  Peter replied 4 months ago.

The address given for your bank account and voting do not affect your tax residence

Expert:  Peter replied 4 months ago.

Hi, please let me know how you are getting on? if you have any queries I will be happy to help.

Customer: replied 4 months ago.
Hi Peter. Sorry I have not had a chance to get back to you this week, and have a proper look at the HMRC guidance. I was probable in the UK less than 60 days in the last few years, but i am thinking this will increase over time. The reason for the question is to see if I can get a mortgage on the same terms as if I was resident even though I am basically non-resident for tax purposes
Expert:  Peter replied 4 months ago.

No problem. Once you have had a chance to work through it let me know.