Expats will keep their tax break
The Government had threatened to scrap the personal tax allowance for some non-residents - but in the end, the axe did not fall
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Calculating your tax bill? The good news is, the personal allowance still stands for expats Photo: Alamy
By Alison Steed and Elizabeth Roberts
11:19AM GMT 04 Dec 2014
1 Comment
The Autumn Statement held good news for the five million Britons living and working overseas – threats to scrap their personal tax allowance were not carried out, and the allowance was actually extended.
In March, when he made his budget statement, Chancellor George Osborne said only non-residents with "strong economic connections to the UK" might be allowed to retain their personal allowance in future. This is the amount of income that can be earned in the UK - such as from a pension or property - before tax needs to be paid.
For the 2014/15 tax year the level was set at £10,000 for a single person. Rates differ according to marital status and age.
However, in his Autumn Statement yesterday, the Chancellor said there will be no change for the time being to the current rules governing an individual’s entitlement to the allowance.
He announced that it will rise to £10,600 for the 2015/16 tax year which starts on April 6 – an increase on the £10,500 he'd announced in March.
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Jon Preshaw, chairman of the Chartered Institute of Taxation's management of taxes subcommittee, said: “This is good news. We were concerned that the changes proposed would make the tax system unduly complicated. The Government accepted that the current system has the advantage of familiarity and for many non-residents presents an internationally competitive tax offering.
“While we recognised the concerns that prompted the consultation, that individuals without strong economic connections to the UK would continue to benefit from the highest personal allowance in the G20, we pointed out that this is an automatic consequence of the decision to significantly increase the personal allowance. We did not think that was a compelling reason, on its own, to change the current well-understood system with a complicated new restriction."
The biggest announcement from the Chancellor yesterday was an overhaul to the stamp duty system. The changes will leave 98 per cent of those who buy homes in the UK better off, but stamp duty bills will rise for those who purchase properties worth more than £1 million.
Alex Gosling, managing director at online estate agents Housesimple.co.uk, said the move was a "bold" one and a "step in the right direction" for those thinking of purchasing property in the UK.
However, the Government is planning to charge capital gains tax on British property sold by all non residents including UK expats from April 2015. The consultation process has finished and draft legislation is due to be published next week.
Meanwhile, expats who regularly fly in and out of Britain with children will benefit from reforms to Air Passenger Duty, which is being scrapped from next May for under-12s flying in economy class.
In 2016, the air tax will be scrapped for all children under 16.
Air passenger duty is charged on all passenger flights from UK airports. The rate of tax varies according to where the passenger is going, and the class of travel.
The Government had threatened to scrap the personal tax allowance for some non-residents - but in the end, the axe did not fall
.newGigyaShare { display: none !important; }
By Alison Steed and Elizabeth Roberts
11:19AM GMT 04 Dec 2014
The Autumn Statement held good news for the five million Britons living and working overseas – threats to scrap their personal tax allowance were not carried out, and the allowance was actually extended.
In March, when he made his budget statement, Chancellor George Osborne said only non-residents with "strong economic connections to the UK" might be allowed to retain their personal allowance in future. This is the amount of income that can be earned in the UK - such as from a pension or property - before tax needs to be paid.
For the 2014/15 tax year the level was set at £10,000 for a single person. Rates differ according to marital status and age.
However, in his Autumn Statement yesterday, the Chancellor said there will be no change for the time being to the current rules governing an individual’s entitlement to the allowance.
He announced that it will rise to £10,600 for the 2015/16 tax year which starts on April 6 – an increase on the £10,500 he'd announced in March.
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03 Dec 2014
Jon Preshaw, chairman of the Chartered Institute of Taxation's management of taxes subcommittee, said: “This is good news. We were concerned that the changes proposed would make the tax system unduly complicated. The Government accepted that the current system has the advantage of familiarity and for many non-residents presents an internationally competitive tax offering.
“While we recognised the concerns that prompted the consultation, that individuals without strong economic connections to the UK would continue to benefit from the highest personal allowance in the G20, we pointed out that this is an automatic consequence of the decision to significantly increase the personal allowance. We did not think that was a compelling reason, on its own, to change the current well-understood system with a complicated new restriction."
The biggest announcement from the Chancellor yesterday was an overhaul to the stamp duty system. The changes will leave 98 per cent of those who buy homes in the UK better off, but stamp duty bills will rise for those who purchase properties worth more than £1 million.
Alex Gosling, managing director at online estate agents Housesimple.co.uk, said the move was a "bold" one and a "step in the right direction" for those thinking of purchasing property in the UK.
However, the Government is planning to charge capital gains tax on British property sold by all non residents including UK expats from April 2015. The consultation process has finished and draft legislation is due to be published next week.
Meanwhile, expats who regularly fly in and out of Britain with children will benefit from reforms to Air Passenger Duty, which is being scrapped from next May for under-12s flying in economy class.
In 2016, the air tax will be scrapped for all children under 16.
Air passenger duty is charged on all passenger flights from UK airports. The rate of tax varies according to where the passenger is going, and the class of travel.
