The never ending cruise

[BBLSP1]

I think that in most cases, no. The toddler would return to the UK or wherever and the issue of US taxation would quite simply never arise. For example US citizens who work overseas get an exemption for the first $75,000 a year of income. And when you also take into account the double taxation treaty and the fact that UK taxes are higher than US taxes, then it really would not be worthwhile for the IRS to chase such people down.

However if that person happens to later become rich and famous, then Uncle Sam might decide to take a special interest in their success.

From personal experience you are still expected to do an annual tax return and declare all bank accounts, property, bonds, stocks etc. etc. regardless of whether you end up owing nothing. And 75k is easily exceeded in certain jobs. Plus, if like some, you end up in the middle east in a zero-tax environment…..

I acquired British citizenship when I was in my mid-40s, and ‘expatriated’ a few years after. Even now, alarm bells start ringing when I deal with non-US financial institutions, as they assume you are still a US citizen (by birth) when you declare your birthplace.

[didds]

And 75k is easily exceeded in certain jobs.

and is subject to the vagaries of the exchange rate... one week you might be $74,999 pa and "clear" then next you are $75,001 and not!

[modellingman]

AIUI you can still spend up to 3 months a year in the UK without being liable for UK tax. So 365 a days a year on a boat could be overkill.

The determining test for those who care about such things is the Statutory Residence Test - a fiendishly complex set of rules which HMRC used to publish as a single pdf but, alas, no longer. Instead, you have to work through the piecemeal presentation in the HMRC manual, Start at https://www.gov.uk/government/publicati ... t-srt-rdr3 or see the primary legislation - https://www.legislation.gov.uk/ukpga/20 ... 45/enacted .

Depending on an individual's circumstances UK tax residency can result from spending as few as 16 days (effectively midnights) in the UK in a tax year. In some circumstances, though, an individual might be able to spend as many as 182 days in the UK in a tax year and still not qualify as a UK tax resident.

Be careful not to fall overboard or otherwise shuffle off this mortal coil in the first few years. At present, IHT on an estate is determined not by residency of the deceased but by domicile. It is possible to acquire a domicile of choice by being non-resident for, IIRC, 5 full tax-years but without a foreign-born father an individual's domicile will generally be his/her domicile of origin which is where the father was born.

modellingman

[Lootman]

AIUI you can still spend up to 3 months a year in the UK without being liable for UK tax. So 365 a days a year on a boat could be overkill.

The determining test for those who care about such things is the Statutory Residence Test - a fiendishly complex set of rules which HMRC used to publish as a single pdf but, alas, no longer. Instead, you have to work through the piecemeal presentation in the HMRC manual, Start at https://www.gov.uk/government/publicati ... t-srt-rdr3 or see the primary legislation - https://www.legislation.gov.uk/ukpga/20 ... 45/enacted .

Depending on an individual's circumstances UK tax residency can result from spending as few as 16 days (effectively midnights) in the UK in a tax year. In some circumstances, though, an individual might be able to spend as many as 182 days in the UK in a tax year and still not qualify as a UK tax resident.

Be careful not to fall overboard or otherwise shuffle off this mortal coil in the first few years. At present, IHT on an estate is determined not by residency of the deceased but by domicile. It is possible to acquire a domicile of choice by being non-resident for, IIRC, 5 full tax-years but without a foreign-born father an individual's domicile will generally be his/her domicile of origin which is where the father was born.

Yeah, I took a look at all that a while ago and decided that I would look more closely if and when it became relevant. That might be sooner rather than later depending on a new government of course.

My main takeaway from the new rules (apart from why make this so complex?) is that it seems to be different rules if you are trying to become non-resident than if you are already non-resident. So it is relatively harder to lose UK residency but, once lost, you can spend more time in the UK.

So to remove doubt I would likely spend zero days in the UK in my first year away, and then relax things somewhat thereafter. From what other expats have told me, the UK taxman loses interest in you if you leave the country for more than about a year. And then only takes an interest in you again if and when you return.

As for domicile and IHT, that is a separate issue, but I can see a few ways around that problem and so am not worried about it.

[Tedx]

This boat (which has yet to sail btw - the next scheduled leaving date is the 15th of June, so a month overdue), is almost like a Golden Visa, which many countries have decided to do away with. I can certainly see the appeal for many looking to, say, retire to warmer climes but without the hassle of arranging Visa's etc

[Lootman]

This boat (which has yet to sail btw - the next scheduled leaving date is the 15th of June, so a month overdue), is almost like a Golden Visa, which many countries have decided to do away with. I can certainly see the appeal for many looking to, say, retire to warmer climes but without the hassle of arranging Visa's etc

Portugal still has a "Golden Visa" scheme. There are a few options but they all involve making some kind of business or property investment.

As I understand it, a key feature is that you are not liable for Portuguese taxation on your income. So assuming that you successfully lose UK residency then you could be in the joyful position of paying tax nowhere for the duration of that "visa".

Although it seems to me that you could achieve a similar thing without investing anything, merely by splitting your time between 2 or 3 different countries. For example Canada and the US both let you stay up to 182 days a year without becoming tax resident.

So if you are really determined to avoid taxation AND you are flexible and mobile, then there are cheaper and easier methods of achieving that than golden visas and eternal cruises.

[Tedx]

I think you can flit between Canada, Mexico and the US - as well as a whole host of other suspect central American countries I guess.

....And you can do the same in Europe with EU and non EU states (although for much shorter time periods).

Most of the customer videos I've watched are folk who are definitely in the decummulation stages of life (which is what you'd expect). And the boat appeals to the 'one stop / no hassle here's your pre packaged retirement market.

[Lootman]

I think you can flit between Canada, Mexico and the US - as well as a whole host of other suspect central American countries I guess.

....And you can do the same in Europe with EU and non EU states (although for much shorter time periods).

Most of the customer videos I've watched are folk who are definitely in the decummulation stages of life (which is what you'd expect). And the boat appeals to the 'one stop / no hassle here's your pre packaged retirement market.

Those central American countries go further. They will give you citizenship and a passport, in some cases in any name you choose! You might choose Eduardo Ximenez, for instance, for your incognito doppelganger and international man of mystery disguise.

But I think that is for a different target demographic than we are considering here.

[Tedx]

Eduardo Ximenez...I like it!

But I think that is for a different target demographic than we are considering here

A bit like...:

https://youtu.be/hxcKmOUGY2w?si=POfdaYUmC74OLdH-

[servodude]

I think you can flit between Canada, Mexico and the US - as well as a whole host of other suspect central American countries I guess.

....And you can do the same in Europe with EU and non EU states (although for much shorter time periods).

Most of the customer videos I've watched are folk who are definitely in the decummulation stages of life (which is what you'd expect). And the boat appeals to the 'one stop / no hassle here's your pre packaged retirement market.

It sounds like a terrifying Dr Who, or Tales of the Unexpected episode
- and probably smells

[modellingman]

The determining test for those who care about such things is the Statutory Residence Test - a fiendishly complex set of rules which HMRC used to publish as a single pdf but, alas, no longer. Instead, you have to work through the piecemeal presentation in the HMRC manual, Start at https://www.gov.uk/government/publicati ... t-srt-rdr3 or see the primary legislation - https://www.legislation.gov.uk/ukpga/20 ... 45/enacted .

Depending on an individual's circumstances UK tax residency can result from spending as few as 16 days (effectively midnights) in the UK in a tax year. In some circumstances, though, an individual might be able to spend as many as 182 days in the UK in a tax year and still not qualify as a UK tax resident.

Be careful not to fall overboard or otherwise shuffle off this mortal coil in the first few years. At present, IHT on an estate is determined not by residency of the deceased but by domicile. It is possible to acquire a domicile of choice by being non-resident for, IIRC, 5 full tax-years but without a foreign-born father an individual's domicile will generally be his/her domicile of origin which is where the father was born.

Yeah, I took a look at all that a while ago and decided that I would look more closely if and when it became relevant. That might be sooner rather than later depending on a new government of course.

My main takeaway from the new rules (apart from why make this so complex?) is that it seems to be different rules if you are trying to become non-resident than if you are already non-resident. So it is relatively harder to lose UK residency but, once lost, you can spend more time in the UK.

So to remove doubt I would likely spend zero days in the UK in my first year away, and then relax things somewhat thereafter. From what other expats have told me, the UK taxman loses interest in you if you leave the country for more than about a year. And then only takes an interest in you again if and when you return.

As for domicile and IHT, that is a separate issue, but I can see a few ways around that problem and so am not worried about it.

Your takeaway is correct. For people who are retired, the thing to understand is the SRT's "ties test", the precise definitions of what constitutes a "tie" (they are legally defined in the legislation) and how the limit on days in the UK varies according to the number of ties held in each tax year. The other gotcha can be the type of assets held - UK property, in particular, can be problematic from a non-UK tax resident's perspective.

modellingman

[Lootman]

My main takeaway from the new rules (apart from why make this so complex?) is that it seems to be different rules if you are trying to become non-resident than if you are already non-resident. So it is relatively harder to lose UK residency but, once lost, you can spend more time in the UK.

So to remove doubt I would likely spend zero days in the UK in my first year away, and then relax things somewhat thereafter. From what other expats have told me, the UK taxman loses interest in you if you leave the country for more than about a year. And then only takes an interest in you again if and when you return.

As for domicile and IHT, that is a separate issue, but I can see a few ways around that problem and so am not worried about it.

Your takeaway is correct. For people who are retired, the thing to understand is the SRT's "ties test", the precise definitions of what constitutes a "tie" (they are legally defined in the legislation) and how the limit on days in the UK varies according to the number of ties held in each tax year. The other gotcha can be the type of assets held - UK property, in particular, can be problematic from a non-UK tax resident's perspective.

Yes and in a way those rules are fair. The benefits should accrue to those who are genuinely leaving rather than to those just temporarily parking themselves elsewhere out of tax expediency.

So if I did this at all then I would abandon "ties" such as ownership of a UK home. And investment in a UK ISA, along with other assets and accounts. And give up my UK passport assuming that I can get another one. This would all also help to lose UK domicile.

[the0ni0nking]

Portugal still has a "Golden Visa" scheme. There are a few options but they all involve making some kind of business or property investment.

As I understand it, a key feature is that you are not liable for Portuguese taxation on your income. So assuming that you successfully lose UK residency then you could be in the joyful position of paying tax nowhere for the duration of that "visa".

Although it seems to me that you could achieve a similar thing without investing anything, merely by splitting your time between 2 or 3 different countries. For example Canada and the US both let you stay up to 182 days a year without becoming tax resident.

So if you are really determined to avoid taxation AND you are flexible and mobile, then there are cheaper and easier methods of achieving that than golden visas and eternal cruises.

Portugal still have a golden visa but it is no longer allows you to do so by buying residential property. Spain golden visa I believe is ceasing later this year.

As that isn't the route re Spain that I was going down, I've not looked at it in detail but suspect the taxation point is slightly different to what you suggest (although for all intents and purposes it may have the same result depending on where investments are held etc).

ISTR that you are taxed on income generated in the country (so if you were to have what is classed as "earned" income while in Spain that would be taxed in Spain). However, what you are not taxed on income from your assets held outside of Spain.

The golden visa in Spain also had some bizarre rules around what constituted residency - which was a lot less on a Golden Visa than it was on other types of visa. That was why I thought the EU was pushing hard on countries to stop the golden visa route via residential property as it basically allowed the evil Russians to buy there way in to the EU.

[Clitheroekid]

This boat (which has yet to sail btw - the next scheduled leaving date is the 15th of June, so a month overdue), is almost like a Golden Visa, which many countries have decided to do away with. I can certainly see the appeal for many looking to, say, retire to warmer climes but without the hassle of arranging Visa's etc

Now two months overdue - https://cruiseindustrynews.com/cruise-n ... l-july-20/

If I'd shelled out my life savings for this jaunt I'd be feeling very concerned. The guy running it, Mikael Petterson, had formerly been running Life At Sea Cruises, which promised a similar concept, but then cancelled everything, leaving many prospective cruisers in the lurch.

I raised questions about it back in 2023 - https://lemonfool.co.uk/viewtopic.php?t=38742 - and I'm afraid I'd feel much the same about this venture. It's remarkably difficult to find out anything about the company running the operation, Villa Vie Residences Inc, but although purchasers are apparently offered a guaranteed buyback the guarantee is only as good as the guarantor. If VVR goes bust then unless the guarantee has been issued by an independent and solvent guarantor (which doesn't seem to be the case) then the passengers would be left - literally - high and dry.

It never ceases to amaze me how people are willing to hand over hundreds of thousands of dollars without even the most basic due diligence.

I await developments with interest.

[Tedx]

Well one of the residents released an update this morning saying that the ship had now passed inspection and was ready to go (apparently there was an issue with the rudder stock (?) which required specialist work.

Both the rudder stocks for the Villa Vie Odyssey passed inspection and installation begins TODAY!!!! One step closer to boarding! Woo Hoo!!!

https://www.youtube.com/watch?v=LXfljZ6er2o&t=5s

The residents have had several viewings/progress updates on the ship.

One to watch, but it's not a scam yet!

[nimnarb]

Meant to leave today but can't find any news that it has? On a Cruise Critics site, there are serious doubts about this one and as CK says, amazed that some would shell out 100's of thousands without really doing some research, albeit I suppose for some, it might be just tip money, some tax loopholes, plus back-up with good travel insurance, why not? Not something I would ever consider. Far too many people for my like with all the germs flying around the place.

I do recall though my grandparents and getting on in years, and when I was very young, taking three to 4 months off each year to go to Spain, over our winters, and stay in the same hotel(everything included plus flights in those days)then do a 3-month cruise in the Summer, and when I asked why, was told its cheaper and more enjoyable doing so. Didn't understand it then.

https://www.travelandleisure.com/villa- ... es-8669699

https://www.travelandleisure.com/cruise ... ruise-ship

https://www.moneyinternational.com/the- ... le-choice/

[Tedx]

Delayed until the end of the month

https://www.travelgossip.co.uk/latestne ... yed-again/

[Clitheroekid]

Delayed until the end of the month

https://www.travelgossip.co.uk/latestne ... yed-again/

Earlier this month, Villa Vie Residences CEO Mikael Petterson said: “The 20th of July is our very, very last date.”

According to Villa Vie Residences’ website, the ship will now depart on 30 July.

So does that mean that 30th July is their very, very, very last date?

[Tedx]

Apparently the new rudder stocks have now been fitted to the ship and the 30th of July date seems to be 'the one'


I did see that in some passenger blogs that they were scattered in various places over Europe while the ship was having these parts fitted


Responding to a comment, the company also stated that guests are being offered different compensations for the series of delays.

“Different situations warrant different compensation. Many residents stayed home and got credited for their cruise fare. Some took advantage of us sending them on another cruise and a trip to the Canaries,” Vila Vie’s official profile said.

“Others decided to do their own thing with a daily allowance. We have had ship tours and excursions for those who decided to stay,” the company added.

https://cruiseindustrynews.com/cruise-n ... itinerary/