I was going to write about the Greek debt crisis and its possible affect on investment portfolios, primarily because I have a great joke to introduce the subject. But there is a pressing need to deal with recent moves by Her Majesty's Revenue & Customs (HMRC) to deprive UK expatriates of their non-residency status and, hence, tax them on their overseas earnings.
But first the joke: did you hear that the Greek government is closing down all the country's taramasalata and hummus factories to avoid a double-dip recession?
Let's hope that it has raised your spirits for digesting the rest of this article, which, I have to say, in view of the subject matter, is a bit on the turgid side.
If you are a British citizen, but a resident in the UAE, the UK government is very generous to you by not taxing your overseas income. But to be eligible for this perk, you first need to be classified as UK non-resident. The rules for determining your residency are vague, but providing you are in full-time employment in the UAE, keep your UK visits below 90 days a year (averaged over the previous four years), do not work in the UK during your visits and do not lead a UK-centric lifestyle, then all is well.
The problem is the last bit. What do you have to do (or not do) to convince HMRC that you have changed your lifestyle significantly by moving overseas? Increasingly over the past few years, HMRC has been challenging residency status by reference to lifestyle and has won some significant court rulings.
All this is about to change as HMRC attempts to firm up on the existing vagueness. On June 17, HMRC published new proposals for the statutory test of UK residence. These proposals, subject to consultation, will become law in time for the 2011-2012 tax year. They will not affect this current tax year.
The text that follows is drawn primarily from a Tax Bulletin prepared by Squire, Sanders and Hammonds, who provide legal council on a worldwide basis.
The new proposal has a three-part test.
Part A says you will be conclusively a UK non-resident in the current tax year, if:
- You were not resident in the previous three years and spend fewer than 45 days in the UK during the current year; or
- You were resident in any of the past three years and you spend fewer than 10 days in the UK during the current year; or
- You are in full-time overseas employment and spend fewer than 90 days in the UK in the current year and no more than 20 days working in the UK.
If you satisfy any of these conditions, you will be judged to be a UK non-resident during the current tax year. Most UK expatriates working full-time in the UAE will fall into this last category and will, therefore, not have to proceed to Part B or Part C.
Part B says you will be conclusively a UK resident in the current tax year, if:
- You spend more than 182 days in the UK; or
- Your only home(s) is in the UK; or
- You carry out full-time work in the UK.
If you fail to satisfy any of the conditions above, in Part A or Part B, then you move to Part C.
In Part C, HMRC attempts to qualify your lifestyle: the more UK-centric it is, the less time you are allowed to spend in the UK before being judged to be a UK resident. The factors that determine your lifestyle are:
- Spouse or minor children being resident in the UK;
- Use of accessible accommodation in the UK;
- Substantive work in the UK (40 days or more);
- More than 90 days in the UK in either of the previous two years;
- More time in the UK than in any other single country (applicable to "leavers" only).
The use of these factors is further complicated by how many of the past three years you were a UK resident. If it was three or more, then you are classified as a "leaver"; if it less than three years, you are classified as an "arriver". HMRC is less generous to the latter category and will judge arrivers to be UK residents on fewer factors.
So, if you fail Part A because, for example, you are working full-time in the UAE, but spent more than 90 days in the UK, then you will be allowed to spend 90 days to 119 days in the UK and still retain non-residency status, providing that no more than three of the above lifestyle factors apply to you.
If four factors are relevant, then you will be classified as a UK resident and will pay UK tax on your worldwide earnings.
All of the above is under review by HMRC, but the word is that little will change when it comes into effect on April 6, 2012.
On the face of it, the proposed rules are basically unchanged for those individuals who are leaving the UK to take up full-time employment overseas, save for the introduction of a 20-day limit on days worked in the UK.
However, anybody who leaves the UK for any another reason, such as retirement, or a locally based person who spends substantive periods working in the UK, may find the new rules restrictive.
Bill Davey is a wealth manager at Mondial-Dubai. If you have any questions on this article or any other financial matter, he would be happy to hear from you at bill.davey@mondialdubai.com
pf@thenational.ae
UAE currency: the story behind the money in your pockets
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO
Uefa Champions League quarter-final second leg:
Juventus 1 Ajax 2
Ajax advance 3-2 on aggregate
The specs
Engine: 5.0-litre supercharged V8
Transmission: Eight-speed auto
Power: 575bhp
Torque: 700Nm
Price: Dh554,000
On sale: now
Asia Cup Qualifier
Venue: Kuala Lumpur
Result: Winners play at Asia Cup in Dubai and Abu Dhabi in September
Fixtures:
Wed Aug 29: Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30: UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1: UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2: Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4: Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6: Final
Asia Cup
Venue: Dubai and Abu Dhabi
Schedule: Sep 15-28
Teams: Afghanistan, Bangladesh, India, Pakistan, Sri Lanka, plus the winner of the Qualifier
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
The specs
Engine: 3.8-litre, twin-turbo V8
Transmission: seven-speed automatic
Power: 592bhp
Torque: 620Nm
Price: Dh980,000
On sale: now
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
THE BIG THREE
NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m
ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m
RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
All or Nothing
Amazon Prime
Four stars
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20electric%20motors%20with%20102kW%20battery%20pack%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E570hp%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20890Nm%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERange%3A%3C%2Fstrong%3E%20Up%20to%20428km%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1%2C700%2C000%3C%2Fp%3E%0A
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
