Expats who still pay UK tax can take advantage of some perfectly legal financial tricks to reduce the amount they have to hand over to HM Revenue & Customs each year.
The tips fine tune tax affairs for couples and take advantage of reliefs and allowances offered by the government which they may not be fully aware.
Top tax saving tips
Here’s a list of the tax tips:
Marriage Allowance – This is not the same as the married couple’s allowance which is phasing out.
The principle behind the marriage allowance is a spouse with an unused personal income tax allowance can transfer up to 10% of the amount to their tax-paying partner. This year (2017-18), the personal allowance is £11,500, so up to £1,150 can be shifted across, stretching the tax-free amount to £12,650.
The claim can be back-dated for two years, boosting the tax saving even more.
Personal Savings Allowance – Basic rate taxpayers can earn £1,000 a year in interest on savings tax-free, so, couples with money in a bank or building society should split their cash so each can claim the full allowance.
Dividend Allowance – This allows all taxpayers to receive up to £5,000 of dividends on shares tax-free this year, but reduces to £2,000 next year. Again, split investments so both partners can make a claim to maximize the allowance.
Although pension cash belongs solely to the named individual on the account, couples can transfer savings and investments to the other without triggering capital gains tax.
More ways to save tax
These tax tricks are perfectly legal and any married couple can benefit from the savings.
Expats have to be UK registered taxpayers to gain any advantage from the reliefs and allowances.
For wealthier couples looking for more savings, consider increasing pension contributions to burn up tax relief or even investing in the Seed Enterprise Investment Scheme (SEIS), which comes with a 50% income tax refund.
