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UK Expats fear Taxation
(14/12/2004)
The Offshore Financial Trade Association (OFTA) reports on a new expat fear of an imminent tax hike.
Suspicion mounts as the UK?s Treasury has refused to rule out a shake-up of the tax rules for expats which could leave many Brits living abroad facing higher tax bills in the future. One fear is that there could be a switch to the American style tax system for non-resident nationals whereby expats will effectively pay the same amount of tax as if they were living in the UK.
As OFTA points out, under current rules, Brits are taxed on income earned wholly abroad according to the tax rules of the jurisdiction in which they reside. The US government, however, compels its citizens working abroad to make up the difference between local tax and US tax if the former taxes are lower. OFTA adds that while the Treasury admits that the issue has been under review for several years, it insists that no major changes to non-resident taxation are in the pipeline.
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