UK Expats: Top 3 Most Friendly Cities
If people where to choose a place to live in, most of them would prefer somewhere with low cost of living, high pay and little to no income taxes. Who would say no to an opportunity to fully enjoy your earnings?
UK Expats, in particular, would like to live in so-called tax havens, won’t you? Some of the most tax-friendly cities include:
1. Dubai
Over the last few years, Dubaihas made significant progress as showcased by their astounding infrastructure and a highly improved quality of life. Its economic backbone used to be solely dependent in the oil industry, but the city has managed to diversify to sectors not related to oil, including tourism, real estate, finance and construction. But what really make Dubai a great city to live in are its low corporate taxes and zero income tax.
Both business owners and employees are sure to benefit from such tax arrangements. Even if UK expats are still subject to UK tax rules, they will at least get a break from taxes in Dubai.
If a British national lives with a non-resident status in the UAE, he’s exempt from paying taxes on his UAE income, provided that he has been declared a non-resident by HM Revenue & Customs.
2. Panama City
Most foreigners consider Panama Cityas a tax haven because of the less stringent tax system. An income that is less than $11,000 will be exempt from income tax. If it goes beyond this amount, tax will be charged at 15%, then 25% if the income is in excess of $50,000. Taxable income includes bonus payments, sales of stocks and bonds, royalties and pensions.
Expats don’t normally enjoy special allowances, only exemptions on property and duties tax. Whether this applies to you or not, however, depends on the type of visa you have. Generally, the income you earn from other countries is not taxable in Panama, but could be subject to tax in the country where the duty is carried out. This is why consultation with tax experts is highly advised.
As a non-resident working in Panama, you will have a salary tax deduction of 12.5%. Once you’re considered a resident, however, you can enjoy any of the tax arrangements mentioned above. To be a resident, you must be in Panama for more than 183 days within a tax year.
3. Montevideo
The largest and capital city ofUruguayis fast-becoming a favourite by British expats. Although it’s not as famous as Buenos Aires, it’s more open and friendlier to foreigners. It has a high standard of living, but lower taxes and more affordably property prices, making it ideal for setting up a domicile.
Uruguay is known as a tax-friendly country where taxes are only imposed on income made from Uruguayan sources. Anything else you earn abroad, including over the Internet, is exempt from income tax. If you want to set up a business, you’d be glad to know that most IT companies enjoy income tax exemption. So, consider starting a business in this particular industry.
Montevideo and most of Uruguay has sales tax, high import taxes, but low property and capital gains taxes.
There are plenty of tax-friendly cities all around the world. But proper planning is essential to avoid any problems, such as double taxation. Because some countries only have tax agreements to select countries, it’s best to get all matters on taxes in order before moving abroad.