Sorry for such a dull tax question but thought it would nicely offset some of the more lurid ?s you get here?

Question

I have to complete a tax return (yipee) for the tax yr Apr 2005-06. Situation is this: I moved overseas in October 2005 (within EU), prior to that I was in employment with PAYE tax deducted at source.
I have two properties in the UK which I let out. At various times one or other of these has stood empty. I also have a few k in investment trusts which I guess are taxed already. Question: without wanting to sound like a capitalist traitor dog, what is the best option for minimising the tax bill - I understand if you set yourself up as a 'sole trader', or limited liability or something like that it is one poss. loophole.
I earn (not very much) money where I am living, teaching English, this is deducted here. There's a double taxation with the country in question (Lithuania). Finally I did some work in the summer for a UK co. on a freelance basis. This will go on next year's return so I need to know best approach should I do any more work on this basis.
Cheers

Answer 1

You need the advice of a Chartered or Certified Accountant who has experience handling ex-pats.

As for the money you have already received, that is settled. You will be treated as a sole trader. You cannot set up a company and transfer the income there after the fact (well, you can, but it would be capital invested and the income would remain taxable to you as a sole trader). Personally, I always had doubts about the value of consultancies being set up as limited companies. Most of the time, the tax savings aren't there. It is really only of benefit if you have major assets to protect in the event of bankruptcy or if your earnings are so high that you want to leave the money in the company (which is probably not the case for a summer contract). You might prefer to remain a sole trader and pay Class 2 and 4 NIC on your UK source consultancy income. again though, that might not be worth it. I have been out of the UK long enough to not know how things are currently on the state pension front.

Bottom line - get advice from someone who can fully consider your situation. Make sure that person is qualified and experienced in ex-pat taxation. When it comes to fees, bear in mind that those fees pay for your peace of mind as well as keeping you on the right side of the taxman - something that is hard to do from another country, even in the internet age.

Answer 2

I agree with the other answers that you will need specific advice.

It looks as though you may be considered resident in the UK for 2005/06. If this is the case then I think you will have to declare all your income for that year on your UK return, wherever in the world it arises. You will, of course, get credit for any foreign tax paid up to certain limits.

You are probably non-resident in the current year. So next year you will have to declare income arising in the UK. The rules on residency and domicile can be very complicated.

It is difficult to see how you could reduce your tax bill. If you are not living in this country then a company formed here would probably cost you more to run than any savings. A foreign company may be the answer (I don't know much about this area) but be aware that most tax havens have little in the way of legislation to protect you from fraud, etc.

Answer 3

Your tax situation is obviously reasonably complex therefore you need advice from a qualified tax expert. This person will charge you a fee but also save you money . Any advice you are likely to get on a forum like this is likely to be full of half -truths and will therefore get you into serious difficulty.

Answer 4

the theory non-public wealth creates jobs is packed with crap. Bush tax cuts in tension for greater advantageous than a decade, the place are the roles? by making use of sheer documents, the backside ninety% of human beings in any state produce greater call for than the superb 10%. companies and persons do no longer employ human beings because of the fact they have a great style of money and are feeling beneficiant, they employ human beings because of the fact they could with the intention to maintain or enhance their revenue. the way this works is via shopper call for. and not using a large style of shoppers or in the event that they are no longer spending adequate, there is no longer adequate call for for companies to enhance and employ greater. If customers do no longer arise with the money for, no person expands. Take a lesson from Henry Ford. He paid human beings no longer in basic terms what they might take, he might have paid them lots much less, yet he paid them adequate that they might take care of to pay for the autos they made, increasing call for.

Answer 5

Is this the correct site for you. Get some professional advice and probably you will save enough tax to pay them.Goodluck, wish I had your "problem".

Answer 6

Sounds like you need an accountant!