Did you notice how the British Budget could affect you?
March 10, 2014
By Jessica Cook
Did you notice the potential changes that could affect you?
The UK budget was announced over a month ago now and one of the things being considered is a reduction in the personal allowance for non- UK residents.
For the tax year 2014/15 the level of personal allowance in the UK is set at £10,000 for an individual. This is essentially the amount of income that can be earned before tax needs to be paid.
At present Non UK residents who reside offshore as expatriates are also eligible for this allowance.
This means that any expat, who derives an income from a UK property or a pension, but is not resident in the UK for tax purposes benefits from this allowance. However George Osborne’s comments confirmed that this could now be in jeopardy.
“To ensure the UK personal allowance remains well targeted, the government intends to consult on whether and how the allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK, as is the case in many other countries, including most of the EU.”
As previously announced, married couples and civil partners will be able to transfer up to 10% of their personal allowance to their partner. This may apply to expatriate couples if one of you has UK source income and the other does not.
There are around 5 million expats and Tax experts believe the personal allowance will still be made available to Britons living in the EU, but other countries popular with expatriates could face changes.
Those who have income from buy-to-let properties in the UK are likely to be hit. According to experts in the sector.
Although it seems unlikely that the full allowance will be withdrawn, even a small reduction through tax could be disastrous for many
The Government has said it plans to consult on the matter before going ahead with any “restriction” on the personal allowance, so keep an eye out!
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