In the case of wealthy individuals living abroad, a DBA could make some countries more advantageous to stay there. If the second country had entered into a double taxation agreement with the United Kingdom, the tax would only be levied on income from British operations. The remaining revenue would be protected from UK tax. Avoiding double taxation Treaties generally provide that individuals and businesses in more than one country do not have to pay taxes on the same income or, in the case of double taxation, a credit is granted in the second country for taxes paid in the first country. It is essential to determine whether this is possible and how a double taxation agreement should be applied, given that it is the country of residence that generally pays tax duties. Inheritance Tax As mentioned in Chapter 15 Other taxes, Thailand came into force for the first time on February 1, 2016, inheritance tax. Thailand`s double taxation agreements do not deal with or mention inheritance tax. Therefore, the question arises as to whether inheritance tax is paid under Thai tax law and whether the deceased`s estate is charged in another country subject to inheritance and estate tax, or vice versa, whether the payment of inheritance tax in the first country is charged on the IHT bill in the second country. Tax treaties aim to avoid double taxation and prevent tax evasion. As a general rule, they offer a means of granting a double payment of taxes on the same income to a person who has income that would normally be taxed in more than one country, or a tax credit for the tax paid in one country against the tax debt of a taxpayer in another country. In addition to providing benefits to taxpayers, double taxation agreements also provide for cooperation between governments in the prevention of tax evasion. If a person is considered non-resident in the United Kingdom under double taxation agreements, that person would only be taxable in the United Kingdom if the income comes from activities in the United Kingdom. This is important because it means that all non-UK income and investment profits are protected from UK tax.
For the purposes of this article, we consider that a person is tax resident in the United Kingdom and resident of an additional country, although double taxation agreements may exist between two countries. Although the application of double taxation agreements is relatively common, the right to tax relief can be complicated. Individuals with dual residences in the UK and another country who have a DBA agreement can apply for full or partial tax relief for income. These include bank interest, royalties, most working pensions and pensions. Double taxation agreements (also known as double taxation agreements) are concluded between two countries that define the tax rules for a tax established in both countries. It is much more common to seek the services of a qualified and experienced accountant to seek tax breaks through double taxation agreements. Fees vary depending on the complexity of an individual`s personal life, in almost all cases, the tax savings far exceed all the costs of using an accountant – and they can be sure to pay the correct amount of tax with total confidence. The table below shows countries that have entered into a double taxation agreement with the United Kingdom (as of October 23, 2018).