AIBU to think expat families returning to the UK but leaving the wage earner behind (not paying UK tax) is possibly illegal (and not just cheeky) behaviour?

[RagingExExpat]

Looking for both opinion and factual content regarding this dilemma as it has confused me for many reasons.

Background - I am an ex-expat and I returned to the UK a while ago with my husband and children.

Many of my friends / people I know of are also planning returns (it's that sort of time - approaching secondary age children and, therefore, schooling prices increase in their current country of residence) and I have heard of quite a few people planning to return with their children but leave their husband (in most cases) behind in the current country of residence.

The plan is to have a family living in the UK with children in school, NHS used etc but the wage-earner staying on in the current country and, therefore, not paying UK income tax as, presumably, the wage-earner won't be in the country for more than the appropriate number of days during a tax year so not eligible.

This feels COMPLETELY wrong to me on a gazillion levels (morally as well as personally for the families involved albeit that's their decision) but, here, I'd like opinions on the tax element of it.

Is this tax evasion / illegal? Surely at some point there would need to be a declaration of where the money to pay the mortgage / bills etc is coming from - particularly obvious if the wife isn't working here at all. Additionally, do you think anyone would be bothered enough (apart from me, obviously!) to report them to HMRC for this if it became obvious the husband lived away and the new school-gate type friends suspected foul play...?

As an aside, I've also, sadly, been in the position whereby friends have returned to the UK when marriages have broken down. For family support etc more than anything else - albeit it is harder to stay in the country I was in without a VISA, and many wives and families are under husbands' visas etc so, sometimes, it may have been a forced move. I understand in those circumstances that an ex-husband may stay on and still be a resident in the country and pay his ex-wife maintenance etc. I can see that is different to the above.

However, when you're all still a family and totally connected but one group are in the UK 'claiming', for want of a better phrase, against UK benefits (schooling, NHS etc) but not paying any income tax due to location of the wage earner. This is shady isn't it or am I being OTT and it's not illegal at all?

What do you all think oh wise Mumsnetters?!

Totally OTT. Nothing wrong with this at all.

That's the system. If you don't like it you can lobby to change it but the people that operate within it are none of your business!

If they choose to see less of their families because they want the £££, so be it. It happens all over the world (people go away t work and send money home). The families are still contributing via other taxes. I'm more concerned with people who are fit to work but pretend they are not and claim money from the system.

And what about the wage earners living and paying tax in the UK while their partners and children live abroad - either in their home country or as ex-pats? These things even themselves out.

I don't think people are doing it to avoid tax. I think they are doing it because job opportunities and where they feel the best place for their children to be, isn't necessarily the same place. The family in the UK will still pay VAT, council tax, etc

Really Frankfurt17? I am surprised. Do you mean nothing legally wrong/shady?

My surprise stems from when we left the UK and the ties we were advised to cut so it looked like we'd really left and were indeed planning a whole new life abroad - which we did! We were away for over 15 years. The reason being that, if and when we returned, we could be subject to taxation on some of the foreign earnings if it appeared we'd not really planned to stay away. There are mentions of 5 years away on the HMRC website if memory serves when I was looking into our return.

I'm surprised you think it's ok to be a part of UK society but not pay your way when you are capable of doing so but perhaps that's it, it's morally suspect (to some) but not illegal / tax evasion.

I don't think it's illegal but it is cheeky. Somewhat akin to not paying a TV licence and watching BBC TV, iplayer etc (although that is illegal).

Can’t see a problem with it. Send your dh back?

It's not illegal to do this, OP - you and I might find it a distasteful gaming of the system, but there's no rules against it

I don't see an issue with it. In fact why should they be taxed twice?
Presumably his earnings are taxed at source in his country, why should he then pay tax and NI for services and such that he isn't using? The money spent by his wife/kids will still boost the economy and be taxed at some stage and it's not illegal nor should it be. As long as they're abiding by the limitations regarding how long he can be in the UK and not misdeclaring anything it's not an issue.
I don't see it as much different to paying a large amount of CM or spousal support, TBH. As the household HAS split, even if the relationship has not.

It's also gone on since the dawn of time for people (usually men) to leave their home countries and go elsewhere, work for a few years and then send their earnings home, or periodically send it to their wives/mothers akin to an allowance to support the family with. Do you think that's wrong too, OP?

I agree re the points above....living and working in the same place aren't always options for some. And yes, I'm not suggesting they are deliberating wanting to avoid paying tax so are staying away but they have realised that they earn much more away but would prefer their children to be here. So they take the hit on family life.

I was curious as to the legalities especially in light of our tax advice when we left. If it was shown that a family and a life was here in the UK, then tax ought to be paid here too.

Agree that VAT and council tax will be paid but neither of those cover schooling, NHS etc. However, I understand it's not a get out what your pay in system! i.e. those who don't work or don't have children aren't subject to fewer benefits or a reduction in income tax

Interesting views on the topic - thank-you

There is something called a statutory residence test. It sets out whether a person meets the criteria for being uk tax resident or not. It is written in black and white. It says a breadwinner can live overseas while their family can live in the uk. There is a price to pay of course - not much family time.

There are double taxation treaties in place with some countries OP, so you wouldn't have been taxed twice on the earnings. In our case, dh is in receipt of an employers pension that is taxed in the UK (an HMG one, so it has to be taxed there) whilst earning abroad.

The family in UK are paying tax, via VAT, Council Tax etc, and if they are high spenders, then the tax man is getting his cut that way.

And yes! Perhaps I should send my husband back

The country in question btw doesn't have an income tax.....hence, earning more. Husbands are not paying twice and, although he isn't using the system, his entire family are and they aren't paying anything to do so - bar their inputs into the economy via council tax and buying stuff

It is really interesting to read the above - I am, as ever, being educated by Mumsnet and different views!

Kestant - thank-you, that's really interesting. I agree re: family time.....it's not something I'd do but some have no choice perhaps?

I honestly thought this was beyond shady i.e. possibly a bit illegal but I see it's not

Thanks all waves

I have a friend whose done this and is apparently eligible for some benefits in the UK because her husband's income isn't taken into account. That's CF.

It depends: do you think that NHS and schools should only be used by people who contribute into the pot? Because that is what you are saying. The people who you are talking about will have contributed to the pot historically but not used it while they were overseas

FWIW (I am ex-pat) NHS can be used for up to five years after you have left the UK if you are UK domiciled and paid NI stamps historically - or something like that.

What if, heaven forbid life changed and your husband was to loose his UK post, your kids were settled into school etc and you both decided best thing was for him to obtain work overseas again, with you guys staying-put in the uk. Would you contact HMRC and offer to make additional contributions for NHS and education ......presumably from what you've said, you would! 😀

Yes, I agree Maursh - as I said above, I appreciate it isn't a "get what you put in" pot otherwise people without children would pay less tax or those who never go the dentist would get a rebate. I do understand that - this just seemed shadier, for want of a better phrase, and I have clearly had my worries about being a tax-payer heightened by the tax advice we received before we left.

I did know about the NHS (the up to 5 years thing) as I was google-ing something once and I happened upon the info about previous 5 years residence / NI payments etc - it was news to me

Hahaha! Yes, Tinkobell, I most certainly would!

Seriously, I think we'd all go together in that scenario tbh but, point taken y'all, it isn't even a bit illegal and who knows what could happen?! Perhaps we wouldn't all up-sticks again and I'd just be left here worrying about my tax situation!!!

....I've lived here my whole life, from a working class family, left home at 18 and paid 52 per cent income tax per annum, had kids privately schooled for 18 years and used private health care. Weve paid in and taken not a whole lot out of the uk system. Sadly we've never been offered a rebate for state school places we never used or the NHS hospital and we expect zero sympathy.

Why on earth would you even give a fuck?

Maybe direct your tax evasion disgust at all the multi national companies that don't pay tax here, or all the rich that avoid paying their tax, or even the banks and their fuckery

YANBU. They are taking the piss. My view is that once you decide to leave a country (and take your money out) you have cut all ties. To come back to leech off taxpayers is obscene.

Your 11:04 post suggests you believed that you were "playing the system" yourself when you left the country always intending to return, but followed advice (from whom?) to "make it look as if we were planning a whole new life abroad" in case you were otherwise liable for any kind of taxation.

Are you therefore saying that you believed playing the system yourself was morally right and proper, but it's not ok for others now that you pay UK tax?

Your morals sound hypocritical and the arrangement you describe sounds difficult for the families involved personally, but it's been going on since the mists of time, also happens in reverse as others have said, and isn't illegal in any way.

I think you are framing this wrongly. Substantial amounts of the money earned overseas are being brought into the UK economy to support the family that has moved back here. I'd hate for the UK to create a system that taxes its citizens wherever in the world they live, the way the US tries to do.

Issues of connection to the UK whilst living overseas relate more to things like capital gains tax, inheritance tax, and what happens when you return. (have some awareness of this as my UK born mother is now planning to return when possible, having lived overseas more than 50 years, as my sister and I have both permanently relocated here. the inheritance tax implications are punitive if she retains her overseas assets)

It’s legal and how would you know where and how he’s paying tax?

It’s not one big loophole that the authorities have never thought about

See here www.expertsforexpats.com/expat-tax/expat-tax-advice/ and www.gov.uk/guidance/nhs-entitlements-migrant-health-guide for more info if you’ve got nothing better to do, op.