Tax Refund and Interest when Overseas

Mr_Matey

Hi,
A few months into next financial year I plan on moving overseas.
According to the HRMC website (http://www.hmrc.gov.uk/incometax/stop-work-refund.htm) I can claim back a lot of the tax paid during the first few months, as I will only have earned a small amount for the year.

Can I claim back NI contributions?

What happens with my savings accounts though? Can I stop them taxing me at a high rate, or do I need to reclaim the tax paid at the end of the financial year?

Lokolo

Savings accounts are never taxed at higher rate, just at 20% rate. If you are a higher rate taxpayer you should have been delcaring the interest with tax return and paying extra..

Mr_Matey

Lokolo wrote: »

Savings accounts are never taxed at higher rate, just at 20% rate. If you are a higher rate taxpayer you should have been delcaring the interest with tax return and paying extra..

Thanks for the info. I'm trying to work out how best to invest my savings before I leave so need to know tax implications.

The question then is, can I get them to not tax it at all, as I won't be earning much next financial year, or does it need to be claimed back at the end of the year?

Any idea on claiming back NI?

Lokolo

Mr_Matey wrote: »

Thanks for the info. I'm trying to work out how best to invest my savings before I leave so need to know tax implications.

The question then is, can I get them to not tax it at all, as I won't be earning much next financial year, or does it need to be claimed back at the end of the year?

Any idea on claiming back NI?

Not sure about NI, it can only be claimed back if you have been paying the wrong amount.

You can get bank interest tax to be interest free if you are under your tax allowance. However I am not sure whether this applies when you are leaving the country, someone else might know....

Cook_County

Leaving the country is not the exact question here. Are you leaving forever for full-time employment overseas.

kimdegsidash

Hi MrM good luck with your move overseas. Tax on savings depends on your residence status in the UK. If you successfully move abroad (ie you don't come back after 3 months) and stay out until 6 April 2011 you will be able to register to have savings interest paid without tax deducted. Until then you are still classed as a UK resident, ie you can't split the year (unless as Cook rightly points out) you go for full time employment abroad. But even then it must last a full tax year to count, so leave the interest taxed until at least 6 April 2011. Hope this helps! Residence is a nightmare!

John_Pierpoint

If you have more than 50K in a "bond" type account, you can get the interest on it paid gross.

One rule for the rich and one for the rest of us?

Presumably HMRC check such high value accounts individually?.

BritRael

As has been said, it's all down to your residence status. But don't worry because if you stay out of the country long enough to qualify for gross interest you can simply claim it back.

I did this many years ago (when I was first 'non-resident for tax purposes') and got a very prompt payment after sending them the forms from my banks/BS's indicating how much I had paid over the period that I was claiming for. After the refund, every new account that I now open, I simply fill in the R85 form and get interest paid gross.

Cook_County

BritRael wrote: »

As has been said, it's all down to your residence status. But don't worry because if you stay out of the country long enough to qualify for gross interest you can simply claim it back.

I did this many years ago (when I was first 'non-resident for tax purposes') and got a very prompt payment after sending them the forms from my banks/BS's indicating how much I had paid over the period that I was claiming for. After the refund, every new account that I now open, I simply fill in the R85 form and get interest paid gross.

Completing the Form R85 would be fraudulent if one was not UK resident. If the bank or building society accepts it, the form one needs to file is a Form R105.

Mr Matey may in case owe tax on UK source interest in the jurisdiction to which he is moving, so this needs more information to answer properly.

de1amo

My brother is a merchant seaman and this is the only class of work which can get paid from the uk and be tax exempt-- he has to be out of the country for most of the year-.He still has to pay full Nİ.-(he pays his tax on earnings but not his savings and has to reclaim the tax on a self assesement form each year however he faces tax on any uk income in the foreign country he resides in outiside his job!--the days of tax exciling and getting money in this country tax free has been closed for all other occupations.-this might answer some of the questions,

Cook_County

Seafarers still qualify for the 100% foreign earning deduction, so pay no UK tax on employment income (but are still liable for UK tax on employment income). The Spice Girls managed to get the 100% foreign earning deduction abolished for the rest of us.