Many of the five million Britons living and working overseas may have missed the announcement in the Budget last week that personal allowances for non-residents
are set to be reviewed.
Every UK taxpayer has a personal allowance, which is the amount of income that can be earned before tax needs to be paid. For the 2014/15 tax year the level is set at £ 10,000 for most people.
However, Chancellor George Osborne said:
To ensure the UK personal allowance remains well targeted, the government intends to consult on whether and how the allowance could be restricted to UK residents and those living overseas who have strong economic connections in the UK,
as is the case in many other countries, including most of the EU.
Any expat who derives an income from UK property or a pension, but is not resident in the UK for tax purposes, could be affected. Tax experts believe the personal allowance will still be made available to Britons living in the EU, but other countries could
face changes. These include destinations such as the US and Australia which are popular with British expats.
Singapore-based Martin Rimmer, tax manager for the Fry Group, said:
This could detrimentally affect those retirees living abroad who are currently not being taxed on their state pension, as well as the raft of others who receive income from UK sources. But it's too early to say if the allowance will be