In last week’s budget, the British Chancellor announced Budget that personal allowances for non-residents are set to be reviewed.
This applies to expats and there are concerns that pensioners could be hit
Every UK taxpayer’s personal allowance allows for a certain amount of income that can be earned before tax must be paid. For the 2014/15 tax year the level is £10,000 for a single person, with different rates according to marital status and age.
Non-residents currently qualify for this allowance. But in his speech, the Chancellor said “the government intends to consult on whether and how the allowance could be restricted to UK residents and those who have strong economic connections in the UK, as is the case in many other countries, including most of the EU”.
Expats who get an income from UK property or a pension, but are not resident in the UK for tax purposes, could be affected.
Tax experts think it likely the personal allowance will be kept for Brits living in the EU. Elsewhere, however, changes are more probable.
Given the government’s consultation, it is too early to know how the allowance will be dealt with.
Last year, the autumn Budget announced the Government would introduce capital gains tax for non-residents selling property in the UK. This is scheduled to begin from April 2015.
