Working in the UAE and TAX

Cook_County

CTA wrote: »

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.

I am sorry to say that I think it is extremely unlikely that CTA is a qualified Chartered Tax Adviser, given the innacuracies in his or her posts.

Residence is not set down in statute (including in taxes acts). Rather it is combination of very limited statute plus several hundred years of case law. Distinct break as a concept for example is not in the law at all.

We will have a statutory residence test from 2013 - but do not t present.

CTA_2

Cook_County wrote: »

I am sorry to say that I think it is extremely unlikely that CTA is a qualified Chartered Tax Adviser, given the innacuracies in his or her posts.

Residence is not set down in statute (including in taxes acts). Rather it is combination of very limited statute plus several hundred years of case law. Distinct break as a concept for example is not in the law at all.

We will have a statutory residence test from 2013 - but do not t present.

You have demonstrated a fundamental misunderstanding of the English legal system as it relates to taxation. May i hazard a guess that you are either unqualified, or have what i would consider to be a more "practical" knowledge rather than a true technical knowledge.

Income Tax Acts: Primarily composed of ITEPA 2003, ITTOIA 2005 and ITA 2007.

ITEPA and ITTOIA are the charging provisions, ITA is the computational act (generally speaking).

ITEPA, which brings employment income within the charge to IT, states at s15 that the full amount of general earnings of a UK RESIDENT employee is taxable to UK income tax.

ITTOIA - section 6 "territorial scope of charge to tax":

"profits of a trade arising to a UK RESIDENT are chargeable to tax..."

Indeed, TCGA 1992 at s9 explicitly states "In this Act, 'resident' and 'ordinarily resident' have the same meanings as in the Income Tax Acts".

Case law/common law, is merely an INTERPRETATION of the statute. The courts have interpreted the meaning of "UK resident" within the meaning of the Income Tax Acts and when one refers to "within the meaning of the Income Tax Acts" this is an all encompassing phrase which captures the case law meaning. This is indeed proved by s9 TCGA 1992, which used the exact terminology I did.

So, next time you wish to "troll" me, may I suggest you pick an easier target?

Post is a proof as to why if you have a tax issue, a seek a properly qualified professional and not the idiots who spout nonsense on here!

John_Pierpoint

It is all so clear cut and it dovetails so well between each nation state; that is why our government is despe4rately trying to make a statutory definition of residence.
Bed time reading here:
http://www.hm-treasury.gov.uk/consult_statutory_residence_test.htm

The reality is that there is power play between the Governments of Nation States and the powerful interests of major corporations (societies of the faceless as they are defined in French).
Well organised capitalists like major corporations, hedge funds and the banks can tell governments what to do. The best known current example is Vodaphone. and bankrupt bank chains which have been showered with printed money.

It used to amuse me when a multinational in the UK suddenly started making profits and pundits would appear discussing improved efficiency (?), greater worker effort(?), brilliant well selling designs(?). Never a mention of a deal that was being cooked up to emerge in 9 months time: To build a new plant with the government chipping in with grants and offering free depreciation, so it made sense to adjust the transfer prices of the charges for use of patents to have a bulge of profits in the UK as there would be little or no tax taken off them but a bright new factory with lots of subsidy to employ the unemployables in some depressed corner of the island.
No wonder the plant would open with fluttering UK flags and those stars circling on a blue background, from the other source of subsidies.

jimmo

[/QUOTE] I was under the impression that as soon as you left the uk and submitted your P85, that was when the date started for your tax free year.[/QUOTE]

When you complete the form P85(
http://www.hmrc.gov.uk/cnr/p85.pdf ), if you tick the yes box in question 15 and confirm that you will have no continuing source of income in the UK (box 19 onwards) HMRC will take your word for it and process your cessation repayment.

You will be regarded as non-resident in the UK from the day after your departure.

Therefore your income from 6 April to the date of your departure will be your total UK taxable income for the year and you will have overpaid tax.

Your earnings abroad will not be liable to UK Income Tax and you will be perfectly free to pay your foreign earnings into your UK bank account if you so wish.

It really is as simple as that.

Unfortunately providing you with evidence of this is a bit problematical.



http://www.hmrc.gov.uk/manuals/pommanual/paye81655.htm

However the best I can do is this.




http://www.hmrc.gov.uk/manuals/rdrmmanual/RDRM10120.htm

You will have to follow the links to charts A,B and C bearing in mind that you need to concentrate on what is relevant to you only.

It is terribly important that you remember that HMRC have taken your word for it that you will be working abroad for a complete Tax Year. If you fail to live up to your word and return to work in the UK to early HMRC could come down on you like a ton of bricks wanting your original cessation repayment back and a lot more tax on your overseas income.

So, I would suggest that if you can plan your affairs so that you are out of the UK for a complete Tax Year, that is straightforward enough.

Anything else and you are literally stepping into a minefield .