Expatriate Tax April 2005

© Friend LLP 2005 People Denise Friend – Corporate Finance Partner William Dowsett – Personal Tax Manager

© Friend LLP 2005 Introduction to Friend LLP Founded in 1983 as Friend & Co Chartered Accountants First US Client in 1984 We act for a number of overseas companies with interests in the UK We offer a broad range of professional advice and services –Audit –Corporate tax –Corporate finance –Personal Tax –Expatriate Tax Providing a professional, personal and tailored service Ensure our services fit your needs rather than your needs fit our services

© Friend LLP Key assignment terms 2.Benefits 3.Potential pitfalls 4.Summary Agenda

© Friend LLP Key assignment terms Duration UK residence position 3 years Overseas residence position Tax Equalise / Localise Dependent on length of assignment Tax equalisation usually fairest way Can work both in favour and against the company What income will be covered?

© Friend LLP Key assignment terms cont. Payroll Remain on home country payroll? Assignments up to 5 years usually more beneficial. For UK payroll can operate an No Tax (NT) PAYE code Social security benefits Social Security Certificate of Continuing Liability – (if employed by UK company) European Economic Area or Reciprocal Countries UK NI for up to 5 years Otherwise 52 weeks Class 1 NIC then no other obligation Overseas social security if employed by overseas company

© Friend LLP Benefits Accommodation Relocation costs Cost of living differences Education Company cars Medical benefits Orientation trip Tax advice

© Friend LLP Potential pitfalls No defined expatriate policy Confusion as to benefits included in package Individuals performance can suffer / less inclined to go on assignment Confused tax position can lead to Inland Revenue investigations e.g. PAYE inspection Additional cost No scope for tax planning

© Friend LLP Summary Planning ahead can greatly simplify matters Ensure company has defined expatriate policy Contact advisers in home and overseas country