Edwards Greene Tax Tips 18

12 47 Supply your employees with one tax-free mobile phone each. Mobile phones provided to employees are tax free, as long as it is the employer rather than the employee who owns the phone and takes out the contract with the telecoms company. Overseas aspects – planning when abroad 48 Be careful of your UK residency status. Your UK tax residency status is determined on a year-by-year basis, without any averaging of days of residence between tax years. You need to be particularly careful if you have left the UK, and want to remain non-resident for tax purposes based on the number of UK ties that you have. Spending more than 90 midnights in the UK in one tax year will mean one more UK tie for the following two tax years. You also need to be careful of the number of days that you spend working in the UK. A detailed record of your movements is essential. 49 Consider leaving the UK to avoid UK taxes on your worldwide income and gains. If you are not UK-domiciled for tax purposes, only the income and gains you bring into the UK are taxed here, although you may have to pay a remittance basis charge. However, you will become deemed domiciled in the UK once you have been tax resident here for at least 15 out of the previous 20 tax years. Your deemed domicile status will apply from the 16th year of UK residence, and you will then be subject to UK tax on your worldwide income and gains. Additionally, IHT will be chargeable on gifts of assets situated anywhere in the world. Once you have been in the UK for 15 consecutive tax years, you will have to leave for at least 6 years before being able to return without any domicile consequences. 50 Realise gains free of UK CGT while living abroad. You can’t escape CGT on the sale of UK residential property while living overseas, but gains on other assets such as shares or commercial property can be tax free, as long as you are non-resident for more than five years. The five-year clock starts from your date of departure, but be warned that for tax purposes, your date of departure might not be the date you physically leave the UK. This publication is for general information and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. This publication represents our understanding of law and HMRC practice. © Copyright 1 May 2018. All rights reserved. You need to be particularly careful if you have established non-UK residency status based on the number of UK ties that you have. Tip £ 50 TAX PLANNING TIPS 2018/19 C r e d i t: i S t o c k / F o t o g r a f i c a B a si c a