Navigating Tax Advisory: Insights from Zahra Kassamali of TaxPI 

In our recent podcast episode, our CEO Pali sat down with Zahra Kassamali from TaxPI, a renowned tax consultancy based in London, to discuss the intricacies of tax advisory. The conversation shed light on critical topics for individuals and businesses dealing with tax matters, particularly in the context of relocating to Dubai or managing UK tax affairs. Here’s a summary of the key points from our discussion. 

UK Non-Resident Tax Rules 

Navigating UK non-resident tax rules can be challenging. While a general guideline suggests that spending less than 90 days in the UK annually helps maintain non-resident status, individual circumstances vary. Factors such as employment, family connections, and previous UK residence can influence residency status. Specific tests and ties must be considered to accurately determine one's residency status. 

Property and Taxation 

For individuals or businesses owning property in the UK, taxation remains a crucial consideration. Regardless of residency status, UK property—whether residential or commercial—is subject to UK tax. This rule applies to both personal and corporate ownership, highlighting the importance of understanding tax obligations related to property. 

Distinguishing Tax Avoidance from Tax Evasion 

It’s vital to differentiate between tax avoidance and tax evasion. Tax evasion is illegal and involves deliberately falsifying information to evade tax obligations. On the other hand, tax avoidance uses legal methods to reduce tax liabilities. Understanding these distinctions helps ensure compliance with tax laws while taking advantage of legitimate tax-saving opportunities. 

Business Owners and Tax 

For business owners moving to Dubai, UK tax obligations may still apply, especially if they continue working in the UK or receive salaries from UK-based entities. However, if structured correctly, dividends from businesses in Dubai may be exempt from UK tax. Proper planning and advice are crucial to navigating these complexities. 

VAT for Online Services 

VAT regulations for online services can be intricate. Different rules apply based on whether the content is pre-recorded or live and whether the client is VAT-registered. Businesses providing digital services must carefully consider these factors to ensure compliance with VAT regulations. 

Management and Control of Businesses – Possible workarounds 

The location of a business’s central management and control can determine its tax obligations. Even if a business operates in a different country, where its management is based can influence where it is taxed. This aspect is particularly important for businesses with international operations. 

Clawback Rules 

Returning to the UK within five years of leaving can trigger clawback rules, potentially leading to additional taxes on dividends or capital gains earned abroad. Being aware of these rules helps individuals and businesses plan their tax affairs more effectively. 

Summary 

Our conversation with Zahra highlighted the importance of meticulous planning and documentation when managing tax residency, especially for those transitioning between the UK and Dubai. Consulting with experienced tax advisors is crucial for ensuring compliance and optimizing tax strategies. 

For more personalized advice on tax residency and business structuring, consider reaching out to tax professionals who can guide you through these complex matters. Proper planning today can help you navigate the tax landscape more effectively and avoid potential pitfalls. 

Feel free to reach out to Strive Consultants to help you make informed decisions and optimize your financial strategy.