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Postby cosmic » Fri Aug 24, 2007 2:29 pm

It is very difficult to change your domicile from the UK to another country for fairly obvious reasons - if it were easy then every one would be doing it as they approached the "great day for the final departure"

As has been said above, you need to move all your assets off shore and at the very least ensure you do not directly own any property in the UK (although some people have moved assets into trusts). Your pension being paid from the UK is OK and will not make any difference to the outcome. My suggestion would be that you ensure you spend as little time as possible (certainly well under 2 months a year) in the UK over the next 5-years, then get a lawyer/solicitor to write to the relevant authorities in the UK informing them that you have severed all links with the UK having lived and been taxed in Cyprus for the last 5 years. If the UK authorities do not accept this then try again every 2-years.

At the end of the day you might have to renounce British citizenship and get a Cyprus passport. It is not easy, as this would create a huge tax loophole for the avoidance of inheritance tax.
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Postby devil » Fri Aug 24, 2007 3:39 pm

I haven't lived in the UK since 1963, have no property or investments there, but received royalties from my books etc. from UK companies. I did not pay any UK tax on my UK revenue, being domiciled elsewhere, without problem. However, about 10 years ago, the IR tried to prove my UK domicile for other reasons and I had hell's own job persuading them that I was officially domiciled elsewhere. I was told that foreign domiciles have to be proved for over 10 or 20 years before they will relinquish some claims and then only if you furnish indisputable proof from official sources, including an attestation from your local tax authority that you have correctly paid all taxes for that time. IOW, I understand that the establishment of domicile from the UK IR point of view is quite tricky and they even require a statement that you that you have no intention of re-electing a UK domicile.

Now for the crunch: if anyone, even a foreigner, legally elects domicile in the UK for over 185 days and is gainfully employed (i.e., pays taxes), then this domicile sticks with him, even if he goes back home. If he dies from culture shock a few years after returning home, he may be liable to pay UK Inheritance Tax.

My recommendation is to write to the IR (by registered post) stating:
1. you renounce UK domicile
2. you prove Cypriot domicile with an attestation you pay local taxes
3. you declare all UK moveable and immoveable property, investments, bank accounts etc.
4. you declare that you have made a will under Cypriot law, duly registered at the District Office
5. you declare that you are exempt from UK Inheritance Tax.

Send a copy to the UK High Commission in N'sia.

I can promise you that you will have a protracted correspondence and it may be several years before they cave in and accept non-UK domicile.
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