Liability to UK income tax when returning to UK?

PsiDOC

I worked abroard for almost a decade before settling down back in dear old Blighty. Now 2 things you must remember with regards to the taxman when being an expat.

1: If you are income taxed locally in the country where you are working then you are NOT liable for income tax in the UK. You cannot be taxed twice. If your boy can prove he paid local tax off his wage slips then you're onto a winner.

2: The 90 day rule. You are allowed back into the UK for a maximum of 90 days per year before having to declare as a resident. You say your lad went out last summer and is coming back in june. Maybe you can count some of his 90 day allowance back into the UK for when he comes back if he hasn't used it all.

Worth a thought.

Oh by the way. The April 6 - to April 5th thing said above does not apply. It's from the date left to the date officially declaring resident again.

Psi

Cook_County

Fengirl is 100% correct as one would indeed expect of her.

To break UK residence for tax purposes one has to be in full time employment abroad for a period that includes a complete UK tax year (the 90 day on average test is not relevant if he does not manage to last a complete tax year).

If life was not like this we'd all be rushing around the world for a few weeks or months work at a time just to avoid UK tax.

Does the country he works in have a tax treaty with the UK? Which country is it?

burnsguitarman

He is in Dubai, his income there is tax free, unfortunately with the state of affairs over there, he may have no choice other than to return, (many redundancies) radical changes to contracts etc. As employers have to sponser the visa's, an ex pat cannot stay in the country for longer than 30 days without employment!
You can see were the confusion lies, there have been so many different answers given already.
Hopefully his job will be ok and he is able to stay at least until next year!

Cook_County

burnsguitarman wrote: »

He is in Dubai, his income there is tax free, unfortunately with the state of affairs over there, he may have no choice other than to return, (many redundancies) radical changes to contracts etc. As employers have to sponser the visa's, an ex pat cannot stay in the country for longer than 30 days without employment!
You can see were the confusion lies, there have been so many different answers given already.
Hopefully his job will be ok and he is able to stay at least until next year!

He would have been familiar with the UK law one assumes - and saved money for just such a possibility of early return to the UK.

ceeforcat

PsiDOC wrote: »

I worked abroard for almost a decade before settling down back in dear old Blighty. Now 2 things you must remember with regards to the taxman when being an expat.

1: If you are income taxed locally in the country where you are working then you are NOT liable for income tax in the UK. You cannot be taxed twice. If your boy can prove he paid local tax off his wage slips then you're onto a winner.

2: The 90 day rule. You are allowed back into the UK for a maximum of 90 days per year before having to declare as a resident. You say your lad went out last summer and is coming back in june. Maybe you can count some of his 90 day allowance back into the UK for when he comes back if he hasn't used it all.

Worth a thought.

Oh by the way. The April 6 - to April 5th thing said above does not apply. It's from the date left to the date officially declaring resident again.

Psi

Incorrect - I am afraid. It may have been the case in your day but the rules were changed some years ago now and it is a fact that you must be out of the country for a complete tax year. There are many of us who work in taxation who offer advice only when certain and Fengirl appears to me to be one of those. Disappointing that such advice is contradicted incorrectly. Your last paragraph is particularly incorrect. The attached exerpt from HMRC manual should clarify matters.


If you are leaving the UK to work abroad full-time, you will only become not resident and not ordinarily resident from the day after the day of your departure, as long as
• you are leaving to work abroad under a contract of employment for at least a whole tax year

• you have actually physically left the UK to begin your employment abroad and not, for example, to have a holiday until you begin your employment

• you will be absent from the UK for at least a whole tax year

• your visits to the UK after you have left to begin your overseas employment will

- total less than 183 days in any tax year, and
- average less than 91 days a tax year. This average is taken over the period of absence up to a maximum of four years – see 8.3 which will show you how to work out this average. Any days you spend in the UK because of exceptional circumstances beyond your control, for example an illness which prevents you from travelling, are not normally counted for this purpose

If you do not meet all of these conditions, you will remain resident and ordinarily resident in the UK unless paragraph 8.2 applies to you.
If your employment comes to an end and you do not return to the UK it will be necessary to consider if you continue to be not resident and not ordinarily resident in the UK.

Cook_County

ceeforcat wrote: »

Incorrect - I am afraid. It may have been the case in your day but the rules were changed some years ago now and it is a fact that you must be out of the country for a complete tax year. There are many of us who work in taxation who offer advice only when certain and Fengirl appears to me to be one of those. Disappointing that such advice is contradicted incorrectly. Your last paragraph is particularly incorrect. The attached exerpt from HMRC manual should clarify matters.


If you are leaving the UK to work abroad full-time, you will only become not resident and not ordinarily resident from the day after the day of your departure, as long as
• you are leaving to work abroad under a contract of employment for at least a whole tax year

• you have actually physically left the UK to begin your employment abroad and not, for example, to have a holiday until you begin your employment

• you will be absent from the UK for at least a whole tax year

• your visits to the UK after you have left to begin your overseas employment will

- total less than 183 days in any tax year, and
- average less than 91 days a tax year. This average is taken over the period of absence up to a maximum of four years – see 8.3 which will show you how to work out this average. Any days you spend in the UK because of exceptional circumstances beyond your control, for example an illness which prevents you from travelling, are not normally counted for this purpose

If you do not meet all of these conditions, you will remain resident and ordinarily resident in the UK unless paragraph 8.2 applies to you.
If your employment comes to an end and you do not return to the UK it will be necessary to consider if you continue to be not resident and not ordinarily resident in the UK.

Sadly all of the opinions that psiDOC gave are incorrect in terms of both UK law and HMRC practice. If the question was about someone in different circumstances - say in a treaty partner country - the answer might be different. I concur with noting the incorrect observations.

moana

max2009 wrote: »

I thought you are classed as a non-resident if 'your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years.'?

Be careful with this 183 day or 91 days in UK a tax year.
I think this only applies AFTER you become Non Resident.

Until then you are only allowed to be in the UK for one twelth of the days you have been out of the UK.

i.e. if you are trying to establish non residency and have been out of the UK for say 240 days then you can only come back to the UK for a period of 240/12 = 20 days if you stay longer then you have to re start your qualifying period.

If you have been out of the UK for say 336 days before the full qualifying period then you can only return to the UK for 336/12 that is 28 days, stay longer and you will have to start requalifying all over again.

I believe that's correct.
Anyone know for sure if it's not.