Tax Implications For Expats Of UK Budget

In our residency series, we examine the ongoing changes affecting Expat residency and tax post Brexit.

Brexit has an impact in changing the rules regarding UK working visas and residency permits for expats from around the world including the EU.

Brexit also had a major impact on the freedom of movement for UK citizens into Europe with a view to living and working abroad. The reverse is true for EU residence looking to relocate into the UK post Brexit.

Overlapping this Brexit process since 2019 have been EU changes to Schengen zone and Schengen zone visas for non-EU expats travelling around the EU as a single entity as opposed to passport controlled movement across border.

This period of change accelerated post Brexit in July 2021, and it’s now due to be fully implemented in the spring of 2023.

These changes include the introduction of electronic travel authorities into the EU.

Schengen zone can limit non-residents 90 days in country visits in a six month period.

With border crossings checked this potentially leads to fines or refusal of entry for expats, travelling to holiday homes on business or to see family around the EU.

UK Tax Changes Nov 2022
In the autumn of 2022 after much ado the UK government implemented a series of wide-ranging tax reforms lurching the country into a post Covid fiscal reality check.

These changes involve few tax rate increases, but many significant adjustments to allowances that will be implemented within 18 months and have an impact over the next 6 years.

Expats with UK interests in property, business and investments should review their tax planning arrangements to minimise future income, business, dividends, capital gains and inheritance tax liabilities.

Expats, living and working abroad in the UK, may be able to take advantage of non dom rules to reduce their liability to rising UK taxes.

UK expats living and working abroad would consider how they hold their assets in the UK. While domicile can still be determining factor in UK tax liability, non-resident expats can take action using family trusts, gifting and business to protect against future income, dividend, gains, property, corporation tax, and inheritance tax rises laid out for the decade ahead.

OECD Two Pillars
Within the OECD auspices the G20 agreed to introduce a new global corporate tax framework.

One objective is to reduce global tax competition between states that has seen average corporate tax levels around the world to fall to 23% from 40% in the 80’s.

The second objective is to ensure governments can tax effectively in the digital economy.

Covid has accelerated the adoption of the remote working building upon the digital nomad concept of the last decade.

Corporation tax is catching up.
Sovereign countries that sign up to the international agreement ( and most have more than 137) have agreed to international standards of corporate taxation.

The key provisions I highlight are:

  • 15% minimum corporation tax paid
  • The Income inclusion rule applies to the ultimate holding parent company with tax liability.
  • Local domestic top up taxes to be applied to companies not paying the minimum globally. QDMTT

It won’t mean a company pays more tax than the highest rate in its home country ,

But it will mean the company will pay a minimum of 15%.

There is some good news for international business.

This only applies to companies with turnover more than EUR 750 million in a year and trading across border.

It’s an evolution. It means tax authorities will set up a digital information exchange for cross border corporate taxation. While it only applies to large multinationals the system is set up to track all expat tax businesses trading cross border.

The UK budget confirmed the UK will adopt the OECD Pillars by 1/12/2023 ensuring a minimum tax rate for multinationals on their global earnings of 15% from that date.

Expats should consider how their contracting and business relationships may be affected and plan accordingly. It will not be as dramatic as IR35 rules but provides a base to impact trading going forward.

Take steps to review your tax plans (book a free review) for cross border business contracting.

Remote workers and nomad workers should consider they need to establish a tax residency to protect again retrospective taxation in years to come.

For more information and guidance contact ProACT.
Tel: 26 819 424,

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