Am I tax exempt?

ltt82

I have been working abroad since slightly before April 2009. My work contract is due to end before the next April but I do not intend to return to the UK immediately (or if I do the total time spent in the UK for this tax year will still be less than 90 days). Do I qualify as tax exempt for the 2009-2010 period? Or do I have to actually be employed abroad for the entire tax year to qualify for this?

slinga

This is a question I always wondered about when I worked overseas.
Luckily it never came to something I had to know.

But you must be outside the UK for a full tax year and during that period there are some qualifications not just the 90 days stuff.

I don't think you have to employed all the full tax year.

TM1976

There is no absolute rule on this. What is true is you definately do have to be outside the UK for a whole tax year and you have to meet the criteria of the 90 day rule.

The other part is based on your "intention" and is highly subjective. In essence you have to prove that you had an intention to leave the UK indefinately. Things like selling your house and relocating your family are indicators of this but they don't prove it absolutely. This would only be discussed if your case was selected for further investigation, (which most aren't). What's for sure is if you reason in itself for staying out of the UK was meet the 1 tax year element of the rule you didn't actually become non-resident. However it's down to you how you present this if asked and it's difficult to prove either way.

In answer to the original question you MUST be outside the UK for a whole tax year and you MUST NOT have returned for more than 90 days during that tax year.

It's possible that you don't need to work for the whole period but if you did it is helpful for proving the more judgemental element on whether if was your intention to leave the UK on a long term basis.

If you are taxed in the country you are working you be able to use a double taxation treaty to avoid being taxed again.

ltt82

Thank you for the helpful reply TM1976. My situation is that my work contract will probably end only a few months short of making a tax year, so I really want to close the gap if possible. Do you think having no place of residence in the UK, and the fact that I was originally on a contract of indefinite length would help my case? Would I be able to make up the outstanding time to the end of the tax year by taking up some casual 'bar work' abroad somewhere?

TM1976

Providing you meet the 90day/year rule you will probably meet the criteria.

Your employment status doesn't really matter for the rest of the year but you need to be demonstrating that your intention when you left the country was to be away in the long term. What indicates this is stuff like did you keep a home in the UK? Do you have family in the UK who didn't relocate with you (eg spouse/kids). This part of the law on residency is supposed to be a catch all to include the people who are just manipulating the 90day/1year aspect to realise income outside the UK.

Most likely is providing you are outside the UK for a full tax year HMR&C won't have sufficient interest in your case to investigate or even ask you about your residency status. All you really need to know if they ask is that meeting the specific criteria in itself is not enough you also need to demonstrate that when you left the UK you did so indenfinately for at least one whole tax year.

Did you provide a P85 when you left to tell them you were giving up residency?