Working in the UAE and TAX

CTA_2

jimmo wrote: »

Beno, your original interpretation of the rules is wrong and, if you are going to gain anything useful from a forum, you will have to accept that and move on with an open mind.

Also, you should not rely solely on any advice you receive here but do your own research to check it out.

In this particular thread we have a prime example.

If you look at CTA’s public profile you will see that CTA claims to be a Chartered Tax Adviser.

However if you google “
HMRC publication IR20” you should eventually end up on the HMRC website and find that IR20 ceased to be effective in April 2009.

It was replaced by HMRC6. You may want to save time by following the following 2 links.


I claim to be a retired Inspector of Taxes but, for you, that is not important. Check out for yourself what I, CTA or anyone else says.

In my days at HMRC the simplest way for a person leaving the UK to become “Non-Resident” was for the person to leave for a job which would keep him out of the UK for a complete Tax Year. If you look at page 47 of HMRC6 that still seems to be the case. In other words if your new job in Abu Dhabi, starting next month, doesn’t keep you contractually working out of the UK until after 5 April 14 you will not become “Non-Resident” under the special rules for people moving abroad for employment purposes.

Your contract seems to be for 1 calendar year, not even a complete Tax Year so you are barking up the wrong tree.

If, as seems likely, you fail the special rules for employees it becomes a lot more complicated, and, as far as I can see, retention of a home or even a bank account in the UK could be your downfall.

you would do well to add that there are no revisions in HMRC 6 which would alter the fact that the IR20 guidance provided is still valid. As a tax professional you would do well to add that in practice advisers will still refer to HMRC's published guidance as IR20 as that is what people trained/worked with.

As always people should seek professional and PAID FOR advice if they really seek it rather than free advice given here. I sacrifice my time freely to help those who ask for it.

CTA_2

Beno wrote: »

Ok so if for example.

I leave on the 1st of Nov 2012
Return on 2nd of Nov 2013

That whole time I wont have to pay tax on any mony I send to my uk account?

But when start working in the Uk in December 2013 say, my salary will be taxable as it is now? yes.


CTA

"You will become instantly liable to UK income tax on your worldwide income and gains on the date you return."

So does this mean when I come back my salary for the year, I have been in the UAE is taxable??? Confused.

Or does this mean I start paying tax asusall when I start working in the uk again?

I am aware that my uk account will be still paying tax on the intrest gained and money getting sent to it from the UAE for the year is this correct?

Sorry for all the questions but this is all new to me.

Thanks

Technically yes you would be liable on your UAE income. However, the split year treatment in IR20/HMRC6 means that HMRC shouldn't treat that as taxable UK income.

John_Pierpoint

I wonder of this book. partly available on Google, does more than suggest that this whole area of taxation is suffering from serious entropy.

Step by step here
http://books.google.co.uk/books?id=QRa8gec09A0C&pg=PA105&lpg=PA105&dq=IR20/HMRC6&source=bl&ots=mcC8ubOSMb&sig=0DWWKLag5THsH28YUyE9H6oZDvw&sa=X&ei=dxMpUO7kOpKKhQfA34D4AQ&ved=0CBsQ6AEwAjgU#v=onepage&q=IR20%2FHMRC6&f=false

CTA_2

John_Pierpoint wrote: »

I wonder of this book. partly available on Google, does more than suggest that this whole area of taxation is suffering from serious entropy.

Step by step here
http://books.google.co.uk/books?id=QRa8gec09A0C&pg=PA105&lpg=PA105&dq=IR20/HMRC6&source=bl&ots=mcC8ubOSMb&sig=0DWWKLag5THsH28YUyE9H6oZDvw&sa=X&ei=dxMpUO7kOpKKhQfA34D4AQ&ved=0CBsQ6AEwAjgU#v=onepage&q=IR20%2FHMRC6&f=false

actually this area is one of areas of our tax code which is handled reasonably well by HMRC. The published guidance is well written and easy to understand.

The gaines cooper case and the new statutory definition of residence may mean some new areas for us to understand but on the whole this area is well covered.

John_Pierpoint

My only experience of overseas employment was in the 1970's:
I simply wrote to my tax office and said "Here are the [STRIKE]days [/STRIKE]nights I spent working in Switzerland - please send me some tax back".

My later prolonged and chaotic experience has been as an executor playing piggy in the middle between the income and capital taxes office - during this experience I found a classic example of HMRC trying to have it both ways over the valuation of a house and in effect demanding money with menaces from a DIY executor [We have bottomless pockets for legal matters so just pay up].
You have now drawn attention to a similar case over "residence" and the "defendant's" adviser is certainly not happy about the fairness and clarity of the situation.
Not what I would call unambiguous advice based on a law that is simple and clear; more akin to trying to get planning permission for change of use.

http://www.robertgainescooper.com/pressroom_post1.html

CTA_2

John_Pierpoint wrote: »

My only experience of overseas employment was in the 1970's:
I simply wrote to my tax office and said "Here are the [STRIKE]days [/STRIKE]nights I spent working in Switzerland - please send me some tax back".

My later prolonged and chaotic experience has been as an executor playing piggy in the middle between the income and capital taxes office - during this experience I found a classic example of HMRC trying to have it both ways over the valuation of a house and in effect demanding money with menaces from a DIY executor [We have bottomless pockets for legal matters so just pay up].
You have now drawn attention to a similar case over "residence" and the "defendant's" adviser is certainly not happy about the fairness and clarity of the situation.
Not what I would call unambiguous advice based on a law that is simple and clear; more akin to trying to get planning permission for change of use.

http://www.robertgainescooper.com/pressroom_post1.html

But Mr Gaines Cooper did not follow the published guidance fully, hence why he lost his case and many appeals. Not ambiguous, just very technical.

John_Pierpoint

Well that is not what his adviser says.

But even if it is true, you are saying that us freeborn English men whose fathers fought against random tyranny, in defence of the rule of law, now are required to drag a professional adviser about with them, just to make sure they are not breaking some random bureaucrats variable book of rules; before agreeing to do something else with their lives in another continent?

This is progress?

No its not it is "jobs for the boys".

Daniel_Elkington

This is what you get in a democracy, as political parties are only there for five years before they must prove to the public that they deserve to stay they tend to focus on short-term sticking plasters rather than simple long term solutions.

If you want a thesis about how tax should be run in this country 2020tax.org.uk would be very useful.

I was under the impression if he was ordinarily resident but not resident as the income is produced overseas and any UK income would, I assume, be classed as incedental to his overseas employment, then he wouldn't be taxed on any non-uk income, however he would be taxed on any income produced by the cash investment (i.e. if the bank account paid interest).

Is this accurate?

CTA_2

John_Pierpoint wrote: »

Well that is not what his adviser says.

But even if it is true, you are saying that us freeborn English men whose fathers fought against random tyranny, in defence of the rule of law, now are required to drag a professional adviser about with them, just to make sure they are not breaking some random bureaucrats variable book of rules; before agreeing to do something else with their lives in another continent?

This is progress?

No its not it is "jobs for the boys".

His advisers? You mean PwC, of course they are trying to convince him otherwise. They don't want a negligence case flying at them for poor advice do they?

And re your comment about "jobs for the boys", Mr Gaines Cooper was an exceedingly wealthy man which is why professional advisers were sought. The ordinary case before us should be able to rely on IR20.

Off the high horse now.

CTA_2

Daniel_Elkington wrote: »

This is what you get in a democracy, as political parties are only there for five years before they must prove to the public that they deserve to stay they tend to focus on short-term sticking plasters rather than simple long term solutions.

If you want a thesis about how tax should be run in this country 2020tax.org.uk would be very useful.

I was under the impression if he was ordinarily resident but not resident as the income is produced overseas and any UK income would, I assume, be classed as incedental to his overseas employment, then he wouldn't be taxed on any non-uk income, however he would be taxed on any income produced by the cash investment (i.e. if the bank account paid interest).

Is this accurate?

He wanted to be completely non-uk resident, including non-uk ordinarily resident such that he would not be taxed on his worldwide income and gains and instead only on his UK source income. However, he failed to create a distinct break from the UK and thus maintained his UK residency within the meaning of the Income Tax Acts.