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Expatriate Tax

Expatriate Tax. April 2005. People. Denise Friend – Corporate Finance Partner William Dowsett – Personal Tax Manager. Introduction to Friend LLP . Founded in 1983 as Friend & Co Chartered Accountants First US Client in 1984

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Expatriate Tax

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  1. Expatriate Tax April 2005

  2. People • Denise Friend – Corporate Finance Partner • William Dowsett – Personal Tax Manager

  3. Introduction to Friend LLP • Founded in 1983 as Friend & Co Chartered Accountants • First US Client in 1984 • We act for a number of overseas companies with interests in the UK • We offer a broad range of professional advice and services • Audit • Corporate tax • Corporate finance • Personal Tax • Expatriate Tax • Providing a professional, personal and tailored service • Ensure our services fit your needs rather than your needs fit our services

  4. Agenda • Key assignment terms • Benefits • Potential pitfalls • Summary

  5. 1. Key assignment terms Duration • UK residence position • < 2 years, 2 – 3 years or > 3 years • Overseas residence position Tax Equalise / Localise • Dependent on length of assignment • Tax equalisation usually fairest way • Can work both in favour and against the company • What income will be covered?

  6. 1. Key assignment terms cont. Payroll • Remain on home country payroll? • Assignments up to 5 years usually more beneficial. • For UK payroll can operate an No Tax (NT) PAYE code • Social security benefits Social Security • Certificate of Continuing Liability – (if employed by UK company) • European Economic Area or Reciprocal Countries • UK NI for up to 5 years • Otherwise 52 weeks Class 1 NIC then no other obligation • Overseas social security if employed by overseas company

  7. 2. Benefits • Accommodation • Relocation costs • Cost of living differences • Education • Company cars • Medical benefits • Orientation trip • Tax advice

  8. 3. Potential pitfalls • No defined expatriate policy • Confusion as to benefits included in package • Individuals performance can suffer / less inclined to go on assignment • Confused tax position can lead to Inland Revenue investigations e.g. PAYE inspection • Additional cost • No scope for tax planning

  9. 4. Summary • Planning ahead can greatly simplify matters • Ensure company has defined expatriate policy • Contact advisers in home and overseas country

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