1st
Sep 2014
George Osborne is planning to take away expats rights to claim personal allowances to put more into the government's coffers. Any personal income that is sourced from the UK, whilst living abroad, could become taxable and this will include any monies accrued from rented properties.
The tax laws at present allows EU Nationals and British Expats to have a personal allowance of £10,000 that can be taken off of any money earned from the UK. If the tax law is changed, then very few will be able to keep their allowance and only if they have a ‘strong economic connection’ to Britain. This system will become similar to those operating in most of the EU, Canada and the US with the likelihood of pensions also being affected.
It was in the March budget that the personal allowance for Expats and EU Nationals was first muted. If this does go ahead then the Government could expect to raise an additional £400 million each year and will affect as many as 400,000 people.
Out of the above, 175,000 people live overseas who are receiving income from renting out property in the United Kingdom. It is felt that many expat landlords, may have to return to Britain because of funding issues and in some cases tenants may be forced out of their homes because of this problem.
As of yet the Treasury has not reached a decision but a spokesperson said:
‘The increases the government has made to the personal allowance support hardworking people by helping them to keep more of the money they earn and, as a result, is one of the most generous in the world. At the same time, we believe that it is reasonable to consider whether non-residents who receive income from the UK are paying a fair share of tax on that income, in this country.’
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