# Where to be tax resident



## mplb (Jun 2, 2016)

My wife and I left the UK over 20 years ago and worked for an well known "international organization" until the end of 2019. I took a separation package that we've been living off since and in which time we moved to The Netherlands. Tax was paid at source on the separation package.

We've been living and working in as tax residents in NL for a few years now but it's time to move on but we're not sure what the best option would be in relation to tax.

We don't plan on working wherever we end up as we will have sufficient funds to relax and see a bit of the world (once that's allowed again).

Our assets come from the sale of our primary residence in NL (which is not taxed in NL) and whatever is left over from my separation package.

Would it be best to consider returning to the UK as a tax resident or would the HMRC go after the profits on the sale of our home in NL and/or what's left of the separation package?

We'd likely spend some time visiting family and friends in the UK but whether or not we'd be there for long enough to be classed as tax resident, I'm not sure.

Is there a preferred option for a country to be tax resident (that doesn't require us to be multi-millionaires or invest a heap of money in property) that would minimize any potential taxes to be paid on our assets (which have either already been taxed or are tax exempt in NL)?

Thanks for any advice on where to start looking.


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## Bevdeforges (Nov 16, 2007)

Tough question - so much depends on your precise financial situation and sources vs. the various (and varying) criteria of each country for establishing residence (both tax and any other kind). And there there are the tax treaties between the source countries for your incomes streams and the country in which you are residing and thus are tax resident.

Just to illustrate the point a bit - apparently the book of rules and regulations on "tax residence" for the UK runs to a couple hundred pages. In France, where I live, there are three criteria for determining tax residence. Meet any one of them and you are considered tax resident in France.

It might be best to first consider what it is you're looking for in a place to live - and then circle back to consider if the tax system in your top candidate countries is bearable.


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## mplb (Jun 2, 2016)

Thanks for the reply Bevdeforges... To be honest, we're planning on travelling around so won't be in one place for too long for a couple of years until we find somewhere that we like enough to retire too. So for now, I'm more interested in being tax resident (which I believe you have to be somewhere) in a country that isn't going to tax our existing assets which have already be subject to tax where required.

If the UK wouldn't tax existing assets then it may be the easiest option to head back there I guess.

Can anyone recommend a tax professional that may be able to advise? I don't mind investing in some good advice if it keeps me on the right side of things.


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## Moulard (Feb 3, 2017)

I don't know UK tax law, but as a general principal from an income tax perspective, assets are not taxed just the income generated from those assets.

Of course there can always be other taxes, stamp duties, levies and the like on assets, but that is a different matter.

So the separation package would not be taxed but the interest it generates would be.

The sale of your primary residence is another matter of course, and almost all countries have some form of capital gains tax with or without exemptions or reductions for the sale of ones primary residence.

From what you state, it sounds like your primary home is your single largest asset so yes, you may very well want to time the sale of the home accordingly particularly if it might be subject to CGT in the country you end up choosing to reside in


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## Bevdeforges (Nov 16, 2007)

One of the problems is that you don't get to "choose" where you are tax resident - it depends on the facts and circumstances of the situation. And, in some cases it can happen that you are tax resident in more than one country.

One of the key features of tax (or any other kind of) residence is where you have a "home" (however defined) to which you return regularly - or by corollary, where you maintain an address at which you can be contacted for official purposes. Like, for your driving license - you need an address so that you can be sent notification of violations and fines you may run up. Where do you maintain a legal address on which you base your health insurance or refer and receive your bills? Or what address does your bank have for you? (Which in some countries will determine what information they will relay to the local tax authorities.)


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## 255 (Sep 8, 2018)

@mplb -- Personally, I don't think taxes should be the primary consideration in determining residence, but it definitely should be a consideration. With that said, there are "many" options -- especially if you are going to spend a lot of time travelling. Bulgaria has a "flat" tax of 10%, if you want to stay in Europe. The UAE has a 0% tax rate. There are many countries in Latin America, that only tax funds that are brought into the country. You have many options! Cheers, 255


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