I think you’ll find that in that case the last country in which you qualified as being taxable in, will claim the right to tax you.
Arguing against myself, there may be narrow exceptions to the general “rule” above. I suspect that some long distance seafarers, and certain offshore oil and gas rig workers might well be treated as non residents anywhere. In the case of oil rig workers, they are often taxed by the country whose territorial waters the rigs are located in. They may not necessarily be resident there, as they routinely head off elsewhere, on their fortnightly/monthly rotations out of the oil/gas rig zones.
I was a long distance seafarer years ago and later a long distance (as in international) lorry driver but, apart from the years when I lived and worked in Australia, was always considered a UK resident for tax.
There was a time, after divorce and remarriage when we were semi resident (ie we had no home only B&Bs in between trips) when I got behind with both tax and SS payments. I was summoned to a meeting in Nottingham when I was told that there was no way I could be absolved of the tax but I could escape SS back payments in exchange for a reduced pension. Fortunately that pension has been sufficient, with others, to fund our modest lifestyle here.
Are ‘t there special rules for off shore workers?
Being resident/fiscally resident, and actually being taxed, are two different things. I believe that as a seafarer under international agreements you would normally be considered tax resident in the country where your home is and you would declare your income there but that country wil not normally tax you on that income. That does not mean you are treated as a non resident, it just means that different rules apply to you.
There are specific arrangements for seafarers, I think, so they still get to tax you.
Having been ‘inside’ investment banking in London for a serious while, I can tell you that for non-Americans and those that haven’t ever been resident in the US nor touched by their tax system, I came across a number of investment bankers who i’m pretty sure were as good as not taxed anywhere. Except for the very low tax arrangements HMRC allows to someone earning in the UK but not resident or domiciled.
It was very important to keep track of any rule changes as to what counted as a day spent in the UK. And to keep exact records of travel and where someone was, at what time on every single day of the year going back years (in case of query). As over a certain number of days in the UK these arrangements would fail and they’d be liable for full tax in the UK. Not that hard to arrange for many internationally-connected investment bankers with large incomes and bonuses to protect.
This sort of professional advice (eg from specialist arms of tbe Big Four accounting firms) is available as our expert here has mentioned. It was very often paid for by the investment bank as part of someone’s employment contract.
At that time, to count as a day in the UK you had to be there past midnight or something. If your airline plane was scheduled to depart at 2359 (even if it was running late and actually left later) or you were otherwise gone by 2359, you might have been there since 00:01 but that day didn’t count as you being in the UK.
If you had been in France for 1 minute though, except for very few exceptions, under French rules that counted as a day you’d spent in France towards a total that might make you taxable in France.
2 Likes
The UK has a whole web of very complicated tax residency rules and loopholes, including the famous non dom status that certain of its high placed politicians take advantage of. Perhaps it is a hangover from colonial days when expats in the true sense of the word were entitled to favourable treatment, and it has suited today’s movers and shakers to keep exploiting those rules. As far as I am aware France does not offer the same opportunities for tax avoidance?
@KarenLot Good grief! You set me off on a trail and I found all sorts of stuff I never knew existed. Definitely for the richer of us though. Us more normal mortals will be taxed whatever. Thanks for an interesting post
1 Like
Older hands at work recounted that UK governments in the 1970s had the following acute dilemma on their hands:- how could they attract global specialist talent to come to the UK to help exploit the emerging North Sea oil and gas fields, including at management/white collar level, given extremely high (83%) marginal UK income tax rates.
They came up with the foreign earnings deduction which enabled UK residents who could arrange for themselves to be away from the UK for 5/6 of the year to be completely exempt from tax on their earnings (known as the the 100% deduction). It was only withdrawn from general use in 1998 (though I think seafarers could continue to use it). Non US Investment bankers latched onto it. So did rock groups on tour…
For Non Dom (and usually non US) investment bankers who inconveniently couldn’t arrange to be absent from the UK for 5/6 of their time, dual contracts (with the same employing group) were often the answer. Their offshore employment earnings were literally exempt from UK tax if not remitted to the UK…Add to that the other advantages of Non Dom’s who kept their investment income and gains offshore, and the result is what famously led The Economist to put on its front cover -“The UK is a tax haven” which caused quite a stir. UK Governments didn’t really want their own citizens to understand quite how absurdly generous the UK tax system was to the fortunate few who could structure their arrangements to minimise their taxes.
2 Likes
Tongue in cheek?" 
What’s that ‘was’ doing there?
Is this not still going on?
1 Like
I’m sure that’s that’s the case. The only (relatively niche) “incentive” that comes to mind is the wealth tax (IFI) exemption on non French property for the first 5 years of residence in France…I recall Macron believing the previous version of wealth tax was off-putting to the ‘wealth-creators’ (sic) from outside France whom he wished to attract here.
No sympathy is required or expected, but I know of one individual, happily living here in France, who is seriously having to weigh up leaving France as the 5 year date approaches. The family involved have land outside France which will trigger six figure € IFI charges on the individuals share of that land, annually…
Probably (!) but less than previously… I think UK govts have relied on the lack of fiscal awareness of their voters for decades, and domicile is a good case in point. It’s incredible to me the concept has lasted. It’s something of a guess but I think most people in the UK had barely heard of non doms, until perhaps the Gordon Brown era. Even if they’d heard of them, I wonder if many could have accurately explained the term…Sunak’s wife’s non dom status obviously gave the term a rocket boost in public consciousness.
I recall the day we first learned about domicile in our early tax training back in the 1980s, at a professional training firm for all the Big 4. . We all looked at each other in complete disbelief that it could exist, and with so little public awareness.
1 Like