I was asked yesterday for some links on the issue of a passport tax; that is a system where UK citizens should pay tax on their world wide income. I remain an enthusiast for such arrangements.
One link is here.
But the best version might be in the TUC's document on this issue - admittedly written by me, linked from here.
The time for this may not have come as yet, but I think it will.
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Spain has reintroduced a World Wide Wealth tax and it is also a criminal offence for anyone, who is legally entitled to spend more than six months in the country, NOT to register with the Hacienda as a “tax resident” (in addition to becoming a registered “resident”) AND file an annual tax return.
All worldly wealth and possessions of any value should be listed in this return — including houses, cars, jewellery etc. This to discourage people “laundering” money by converting it into material possessions (as an alternative to farting about with the Isle of Man)
It is easy to lose UK residency — but you MUST notify HMRC in writing that you are leaving the country, although you are under no legal obligation to tell them where you are going. But HMRC makes it VERY difficult to lose UK citizenship.
Once you have left the UK you are no longer entitled to free UK health services, if you use any NHS services whilst excercising your 90 day UK visit allocation you pay!
In Spain there is no free medical provision for ex-pats under the age of 65 who are not paying Spanish national insurance contributions — you must pay for everything.
Although it costs nearly twice as much for a non resident to renew a UK passport than a UK resident this still remains “good value” as the bearer retains the right to call upon the services of British Embassies — and is able to rely on the UK as a safe haven in times of trouble.
The PSG fully supports both a “Passport Tax” and a “World Wide Wealth Tax”.
And not just because the later would give the Crown Dependencies some comeuppance!
It’s funny that PSG mention giving the Crown Dependencies some comeuppance. As an ordinary taxpayer in Jersey (not a HNWI or an offshore specialist) I declare my worldwide income and Jersey income to the local tax office. It’s a lot simpler than the position my wife is in, because she still has to make a return to HMRC, and they don’t supply the online facility to do so – it requires third-party software.
Hi James
So what’s new about anyone paying tax on ALL (taxable) income?
Everyone in the world is legally obliged to do this — except perhaps people living in Guernsey!
Surely the relative simplicity of the Guernsey system compared to the one imposed by the HMRC on your wife is to be expected. After all you have chosen to live in a foreign country (or so a number of people living in Crown Dependencies like to think) and some minor irritants are inevitable.
That there is no “online facility” provided by the HMRC (except by downloading free software) for the millions of expats scattered around the world is a national disgrace and one that must be addressed by George Osborne (or whatever his name is) immediately.
Many PSG members don’t own a computer so are saved this dreadful inconvenience.
You may be pleased to learn that they also find your comments equally “funny”.
PSG
Please get your comments straight – James said that he lives in Jersey, not Guernsey!
You criticise him for choosing to live there – have you checked to see whether he was born and brought up there? A lot of people are, you know!
Hi James
Please accept apologies for the error in referring to your island home as Guernsey.
Rather like calling someone English when they come from Wales…
Or perhaps not as Jersey and Guernsey are two separate countries with their own weird and wonderful tax laws.
That you have decided to live there was not intended as any personal critiscism — only drawing attention to the occasional inconveniences people must expect to encounter when living in a foreign country.
No hard feelings we hope.
PSG
Trust me – the inter-island rivalry is very strong. Keeps us all on our toes ! Dates back to the two islands taking different sides at one key stage of English/French history, which is why there are two separate Bailiwicks rather than one.
Being a UK citizen, and working abroad, i DO pay tax on my worldwide income.
I pay UK tax on income earnt in the UK, and am taxed locally in the country where I work.
Are you suggesting I am doing anything illegal by doing this?
No
I’m not
But many do not do what you are doing
Pls read the proposal