Moving back to the UK from abroad. New job now would be dangerous tax-wise?

Gordias

Hi,

I've been working in Jamaica since March 2010. HMRC knows I'm here as we rented out our house, claimed gross payments and they sent out the full "working abroad" form to our Jamaica address (which I filled in and returned).

My family have since gone back to the UK as my wife is pregnant and I've stayed living and working in Jamaica with trips home to see them.

I'm looking at wrapping up Jamaica at the end of this month.

I believe I easily qualify for non-residency in the UK on the old 91/183-day rule and can make a fairly good claim under the new rules by the fact our house was, and still is rented out and my family was with me for the majority of the tax-year too.

Trouble is, if I start work in the UK before 6th April I have to complete the employment section of my 2010/11 tax return in full and this I think may scupper my claim of a full year of non-UK-residency? Tax-wise this would mean going the double-taxation route and my Jamaican tax is much lower; hence I'd have to pay the difference.

Would it be dangerous to start work in the UK before the tax year is out or should I be a man of leisure and not risk any complications?

Thanks.

jimmo

Just in case anybody else didn't know, a new HMRC6 was published last month.
http://www.hmrc.gov.uk/cnr/hmrc6.pdf

OP,
Are these the new rules you are referring to?
If so then if you return to the UK before 6 April 2011, you will not have been outside the UK for a complete tax year and will not become Non Resident.

Gordias

Thanks jimmo... gave it a good read through, looks like under my current plans I'm liable for UK tax, albeit with relief for my tax paid in Jamaica. So I'm safe to start work as I'm going to get taxed anyway.

Cook_County

We don't of course know what you said on the P85 so whether perhaps you might be able to claim detached duty relief. More likely is that you can claim treaty residence in Jamaica to avoid double taxation.

The treaty is here:
http://www.hmrc.gov.uk/MANUALS/dtmanual/dt10550+.htm

Gordias

Yep, I've been through the HMRC Double Taxation Treaty between the UK and Jamaica with a tooth comb and also Jamaica's rules on residency.

My conclusion with a good degree of confidence is that I am officially a resident of both countries in this tax year and as such this treaty applies to me.

My employment satisfies all the criteria in Article 15: namely that Jamaica and UK income is easily definable as arising from work conducted in said countries independently so the outcome is: Jamaica tax me on their income, the UK tax me on their income and never the twain shall meet.

Much happier person, I can also start work in the UK without fear of becoming a resident again and it affecting what I earned in Jamaica

Cheers guys! :T

Cook_County

This is not a surprise. You are domestically a resident of both countries but under Article 4 you are doubtless only a resident of Jamaica because you presumably had a permanent home only in Jamaica and not the UK.

On this basis you file a treaty-based UK tax return arguing you are a non-UK resident under the tax treaty. Look at HMRC Help Sheets HS302 and/or HS304 (these numbers are from memory so may not be up to date) for an explanation as to how HMRC want you to claim this.