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What's the tax arrangement between the UK and Panama? My

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What's the tax arrangement between the UK and Panama? My husband has been offered a job in Panama City in the Colon free zone with means he won't be taxed on my income in Panama. Will the UK try and tax him on his income in Panama?
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The UK has a Double Taxation Treaty with Panama which precludes the same income stream being taxed in both jurisdictions. This is achieved by means of tax credits, the tax paid in one country being allowed as a tax credit against the liability in the other. The Treaty does not protect against differences in rates of taxation. Please tell your husband to get the tax administration correct. When he leaves the UK for Panama he should send a Form P85 to HMRC. On receipt HMRC will class him as non resident for the tax year after the date of departure and furthermore split the leaving year into two portions, one resident and the other non resident. Thereafter he should not be taxed by the UK on his Panama income. When he eventually returns he should advise HMRC and the split year system will reverse. If he uses the P85 then he will find dealing with HMRC much easier. Once he is classed as non resident he must ensure that he spends no more than 91 days in the UK in any one tax year to maintain his non resident status. In theory this 91 days can be averaged over four tax years, but the general consensus amongst experts on this site is never to breach the magic 91 in any one tax year. I do hope that you find my reply of assistance. Please ensure that he does not neglect the P85 procedure.
Customer: replied 2 years ago.
Thanks Keith, So does he need to remain out of the U.K. for a minimum of 4 years? Will we be taxed on any money he sends back to the UK?
Well no, but it is better all round if he does. He must spend at least a full tax year as a non resident to benefit from the split year treatment. Here is the Gov UK guidance on non residence:
'You’re automatically non-resident if either:
you spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years)
you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working'
Money remitted to the UK is outside the scope of UK taxation.
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Customer: replied 2 years ago.
Money remitted to the UK is out of scope for taxation, however presumably if we use the money to invest in property or other investments which generate an income in the uk we have to declare right?
Correct, any moneys earned from property or other investment in the UK must be declared. However as an EEA citizen your husband still has his personal allowance of 10.6K to offset this. UK deposit takers routinely deduct Income Tax at the standard rate unless advised to the contrary by means of a Form R85.
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