Tax rebate when moving abroad

andjmiles

I'll be relocating overseas on 1st October and up until now my total earnings haven't reached the 40% threshold. So will I be entitled to reclaim the amount I've paid at 40% up until now?

fengirl_2

It depends on your residence status. If you are going to be out of the Uk until at least 5 April 2011, then you can reclaim some of the tax paid this year. You need to download form P85 from www.hmrc.gov.uk.
Your repayment will be calculated on your total pay this tax year, plus any benefits in kind, less your personal allowance. The balance will be taxed at 20% and then 40% and any overpaid tax refunded to you.

andjmiles

Thanks for the reply. We will be leaving for an extended period of at least four years so comfortably qualify. Just out of interest, how come staying out of the country for the 10/11 tax year affects my status for the current tax year?

As an aside, I assume we will have to pay no tax on rental income from our property here in the UK while we are away?

fengirl_2

In order to be regarded as not resident in the Uk for any period, you need to be out of the UK for at least a complete tax year. If you leave the Uk on 1 October, it is obviously impossible for you to be out of the Uk for the entire 09-10 year, so you have to be out for the whole of the next complete tax year in order to be regarded as non resident from 1 Oct 09.
If you are non resident then your overseas earnings would not be taxable in the UK, hence the repayment of tax on earnings here up to 30 Sept. If you were only going to be abroad until June next year, say, your overseas earnings would need to be taken into account in deciding your UK liability and so no repayment would be due on departure.
Your rental income is taxable.

Cook_County

fengirl wrote: »

Your rental income is taxable.

I think fengirl could have added a few words at the end ... It should read "Your rental income is taxable in the UK and may also be taxable in the country where you are moving".