Expatriate taxation - CIOT - The Chartered Institute of Taxation

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CIOT RESEARCH PROJECT ON EXPATRIATE TAXATION Peter Ashby 2 6.2.07
CIOT RESEARCH PROJECT ON EXPATRIATE TAXATION FOREWORD My original brief is available as an Appendix (page 67), and I have included this to enable any reader who would like to trace the original thoughts for this research document. I have done this as the brief has evolved over time, the document having been written in the time frame of April to November 2006. I have “interpreted” the original brief to enable me to produce a document that captures “many” of the issues in expatriate tax that practitioners have to deal with on a regular basis for their client body as a whole, even though the majority of clients would have just a few of the issues, or none, affecting them in any particular year. I say “many” because I am aware that there are a few bespoke planning points that are not in the public domain, and that the client and adviser wish them not to be in the public domain. They are presumably in the Tax Avoidance Disclosure files of HMRC! The issues that are addressed are the most common contentious ones that I have seen in practice. In drawing up the list, I have consulted with fellow practitioners and used the benefit of my experience with PricewaterhouseCoopers. If I were to dedicate this document to anyone, it would be to those colleagues at PwC who have provided me with the material over the years. These areas are ones where there is no clear legislative or case law support for “a position of certainty” to be ascertained by the adviser or followed by taxpayers. The positions taken by most taxpayers advised by practitioners of expatriate tax are based upon a combination of precedent and the general consent of HMRC expressed insofar as the position taken has not been successfully challenged in a Court before or where HMRC do not take the point. All taxpayers are, of course, required to self assess their tax position. They are expected to be able to complete their SA return using only the sources of information available in the public domain. As will be seen, this is clearly impossible, even for a taxpayer advised by an expatriate tax specialist tax adviser. The reason is that positions have been agreed over the years based upon common sense, and have eventually become “law based upon custom and practice” rather than based on statute. More importantly, the positions have not been made generally available to the public. In outlining the areas of uncertainty I have, where possible, postulated some pragmatic solutions to the issues. Some of these will be familiar to expatriate tax specialists, but most are born out of areas where the taxpayer and HMRC will potentially disagree and for which there appears to be no alternative, in the event of a challenge, but to go through the Courts for a ruling. It is unusual to have so many issues that have been outstanding for many years, but expatriate tax has always been treated as an area requiring much less attention than most other areas of taxation because there is “so little taxation at stake”. This view of the amount of tax at stake has been expounded to me from a variety of HMRC sources, and is not attributable to any one individual. However, a few statistics will explain why this appears to be so. HMRC have said that they have about 55,000 expatriate cases registered with their expatriate specialist centres. The majority of these cases are dealt with by the Big 4 accountancy firms. HMRC also Peter Ashby 3 6.2.07
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Expatriate taxation - CIOT - The Chartered Institute of Taxation

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