Interesting UK Allowance Change Being Considered

Saw this article in the DT, so thought it may be of interest. Have also included a 2nd link regarding La Dolce Vita, from the same newspaper.
If the first article comes about, then there could be problems!!!!

http://www.telegraph.co.uk/finance/personalfinance/expat-money/11027075/Expats-face-400-million-tax-raid.html

Thanks Geo, very interesting, if not stupid on the part of the UK government. This....

At the same time, we believe that it is reasonable to consider whether non-residents who receive income from the UK are paying a fair share of tax on that income, in this country

is typical of the stupidity... just why are these people paying taxes in the UK in the first place.... Another side of it is the so called £400 million they would save. Well I would hazard a guess they will save nothing and in fact end up paying out the same if not more as the end result would be many returning to burden the NHS and welfare state and still get their 10,000 allowance. Finally they would have to get it past EU law on freedom of movement, which is very high profile at the moment.

The other link I think should be a separate topic something of the likes of "familiarity breeds contempt", which I'm coming to think is correct of most things in life. Not there yet on Italy life, but could see it easy happening.

Here is a link to the consultation paper on this subject -

https://www.gov.uk/government/consultations/restricting-non-residents-entitlement-to-the-uk-personal-allowance/restricting-non-residents-entitlement-to-the-uk-personal-allowance

Thanks RobJW for the link. I was a little surprised that more people did not pick up on this as a costly change.... Must all be like us and think it might never happen, why worry. Or could it be we are all too well off! A quick read and anyone not in the UK for their 182 days in the tax year or classed as tax resident there for any other reason, there will be no change under the proposed change... I thought this other aspect would not involve many, but according to their stats it does, so it also looks like if your income is a UK government derived pension, there will be no change... Who knows what will come out, if anything, perhaps we don't really care!  

As usual the press latch on to the negative at the extreme end and ignore the reality of most situations.
 
For anyone who is UK tax resident and not Italian tax resident the proposals will make no difference.
 
For anyone who is Italian tax resident and not UK tax resident the proposals would make a difference but should not affect the total overall amount of tax being paid, assuming that they are actually declaring all of their income to the Italian tax authorities. This is because, apart from certain specified income, a non-UK tax resident but Italian tax resident individual is liable to be taxed on their worldwide income in Italy. The effective personal allowances are lower (substantially) in Italy and the tax rates are higher. Consequently, even without the UK personal allowance the amount of UK tax payable is likely to be less than the amount of the Italian tax payable. There may be some individuals with low incomes who would end up paying slightly more UK tax than their Italian tax liability and one of the matters for consideration in the consultation document is how this potentially vulnerable group can be protected.
 
So far as pensioners are concerned, an Italian tax resident who is in receipt of a UK government pension (including certain local authority pensions) is only taxable in the UK on that pension. The consultative document proposes that such individuals would not lose their personal allowance. All other UK pensions, including the normal State retirement pension, are only taxable in the country of tax residence.
 
Where it will make a difference is to those individuals who are not UK tax resident living in Italy and are not declaring their UK income to the Italian tax authorities; i.e. those individuals who are trying to keep their head under the radar but are in fact tax evaders.
 
At the moment it is only a consultative document and any changes are only likely to come in from April next year. However, as the UK government is looking at increasing their tax take as much as possible and is effectively subsidising other countries by having a disproportionate amount of the tax payable by non-residents with income arising in the UK being paid in the overseas country, it is likely that the rules will be changed. We have seen this recently regarding the UK government’s attempts to reduce healthcare costs in respect of non-residents with the withdrawal earlier this year of the long-standing practice of paying for the healthcare of people leaving the UK for up to 2 ½ years after leaving. From July this year anyone under the state retirement age who moves to Italy and is not working (i.e. early retirees) has to take out private health cover in Italy to register as resident to legitimise their staying in Italy if they are there for more than three months.

Thanks Panner for the comprehensive answer, very much appreciate the time taking to clarify it. I do suspect there are actually a number of ex-pats in the lower income bracket and if implemented I hope they find a way to lessen the impact.
Personally I find the proposal deplorable and unfortunately typical of a number of similar actions by the UK government (and other countries) to "move the goal posts". I cant recall how many years we were told to save and plan for later years, then at the drop of a hat, they "need" to change everything you based your plans upon! Just what does it teach the current generations - simple "legal" theft and deception is the name of the game.

I know what you mean Steve.

We had everything planned and then they changed the state pension retirement age which made a small difference to me but my partner was one of those that got put back first 3 to 4 years and then 6 years as she was in the transitional approaching retirement age group that got particularly hard-hit with little time to do anything about it. Then, just as we were starting to finalise things for moving they change the rules on healthcare cover. So a double whammy of having to somehow structure and sort out healthcare and the loss of 6 years state pension for my partner.
 
It means is that we will be a quite a bit worse off for a few years and then slightly better off as my partners state pension will be a bit higher than it would have been under the old rules. It will probably take over 20 years to make up the difference though.