So you're thinking about relocation but you're unsure about what it all means for your tax position... Well, to be brutally honest - neither are we! Well, at least until we explore it in further detail as there are so many variables and that is why we have partnered up with Moore Kingston Smith

As an individual thinking about moving to Paradise from the UK - there are some considerations:

Losing UK tax residency status

Apart from the quality of life (and the weather!) in Paradise, one of the most attractive aspects of relocating there would be that an individual could lose their UK tax residency status and enjoy their earnings in a lower tax regime. The key here is that it is not becoming a tax resident of Antigua & Barbuda or Barbados or any other island for that matter which is important, it is losing UK tax residency that is critical. The islands have created visa programmes that allow you to work for up to 2 years (Antigua & Barbuda and 1 year in Barbados) without affecting your tax position

However, losing UK tax residency is difficult. The way the rules are drafted generally means that an individual is allocated a number of days they can have in the UK before they become UK tax resident.

It is possible to cease to be UK tax resident for a year but still be caught by the “temporary non-resident rules” which can cause income and gains earned while non-resident to become taxable in the UK if the period of absence from the UK is less than 5 years.

The easiest analysis of the residency rules is in relation to employment income. Employment income is generally not subject to the temporary non-resident rules so, in a year working in Paradise, a person can earn their salary free of UK tax.

Opportunities from being non-UK resident

• A non-UK resident individual who is an employee and performs their employment duties outside of the UK is not subject to UK tax. They can apply for a “No Tax” or NT code from HMRC and once issued, this PAYE code means that the salary paid to them by their employer will not suffer a tax deduction at source
• A freelancer working through their own UK LIMITED Company and falling within the new IR35 regime, which commenced on 6 April 2021, can escape this regime by becoming non-resident. They may even want to operate through a non-UK company instead of their former UK personal service company
• Individuals who operate UK businesses through a company can receive dividends from those companies without a UK tax charge (although dividends paid from profits earned prior to ceased to be UK tax resident are subject to the temporary non-resident rules)

For individuals who can be absent from the UK for more than five years, they can also:

• Sell assets (other than UK residential property and property rich companies) without a UK capital gains tax charge
• Draw down on their UK pension and claim relief under the UK/Antigua tax treaty to cause the pension income to be exempt from UK income tax
• Draw dividends from UK companies which are funded with profits earned prior to their UK tax residency status ceasing

There are of course many arising scenarios and considerations of which we would be more than happy to discuss and explore further with you

Other considerations maybe Antigua & Barbuda's Citizenship by Investment Programme or Permanent Residency Programme:

There are over 27 countries with residency or citizenship by investment programmes. The growth of these programmes is being fuelled by a worldwide explosion of wealth, greater access to travel and freedom to live in multiple territories all set against a background of unnerving and growing global uncertainty pushing individuals to seek alternative options particularly around tax, security and lifestyle.

Dual citizenships provide individuals with more opportunities especially around tax providing a better quality of life and peace of mind. 

The Permanent Residency Program is open to non-citizens only and provides a simple way to access the benefits of the favourable tax laws in Antigua & Barbuda.

Successful applicants receive a Permanent Residency Certificate.

Application requirements are as follows:

• Either own or lease a permanent home on the islands 
• Spend a minimum of 30 days a year in Antigua & Barbuda
• Annual income in excess of US$100,000
• Pay an annual tax of US$20,000 per annum to Antigua & Barbuda

Permanent residency in Antigua & Barbuda has some very clear and financially beneficial incentives:

• You would no longer be subject to any worldwide income tax
• You would no longer be subject to any inheritance tax
• You would no longer be subject to any capital gains tax

To explore more please CONTACT US