Expats urged to review sources of UK income amid tax raid plans

Property owners and pensioners who face losing their personal tax allowances can take steps now to protect themselves, say experts

Expats facing the possibility of losing their personal allowance under a tax raid proposed by George Osborne should not panic but look carefully at where their UK sources of income come from, according to experts.

The estimated 175,000 people who live abroad and earn an income from property in Britain could be affected, as could retirees. The measure could cut an expat couple’s income by up to £4,000 a year.

At present, EU nationals and British expats can offset income earned in the UK against the £10,000 personal allowance. Under the Chancellor’s proposals, this would be restricted to people with a “strong economic connection” to Britain.

Many of the 1.2 million British retirees living overseas will not pay extra tax on their pension because they are either UK residents for tax purposes, as they spend half the year in Britain, or because most state or private pensions are only taxable in the country of residence.

However, UK government pensions are only taxable in Britain, meaning that unless the Treasury introduces exceptions, former civil servants, NHS workers and council officials living overseas will pay more tax.

http://www.telegraph.co.uk/finance/personalfinance/expat-money/11031690/Expats-urged-to-review-sources-of-UK-income-amid-tax-raid-plans.html