Non tax resident and offshore accounts ....

nonresident

I contracted in Ireland for a few years. I reduced my tax bill by working through an umbrella company based in the Channel Islands. No local income tax was due. I was registered officially as non tax resident in the UK, as I was living full time in Ireland. I did pay income tax on the salary I brought into Ireland - but the majority of my salary was paid into an offshore account.

Technically, I paid all taxes due ( no tax due on the cash kept in the Channel Islands, and Irish income tax on my salary). This cash was earned whilst non-tax resident in the UK.

Total funds were around 50K in the offshore accounts.

When I finished working overseas, I moved back to the UK.

I closed my offshore accounts, and transferred the balance to my UK bank to buy a house on my return.

This amount coming into my UK account was registered as 'income' by my accountant, and pushed me into another tax bracket. so, the taxman got a very large chunk of my 50k.

I have no problem paying all taxes due, but as the cash was earned whilst non tax resident, and all due taxes were paid on the income...I just wondered if it was right that my accountant labelled the cash as income in the last tax year, and I was taxed on the funds....

Or do I just put it down to an expensive lesson learned...!

00ec25

define a "few years" - if less than 5 you may be classed as a "temporary non resident" and have therefore been taxed on the remittance basis
http://www.hmrc.gov.uk/international/return-uk.htm
if you do not trust your accountant then pay another one for a second opinion ?

nonresident

Thanks for the reply. It was less than the required 5 years...so I suppose the tax was due to be paid.

Laurajo_2

Ouch...did you make your accountant aware of your intentions? If so, he should have forewarned you and I am sure that something could have been done to keep you under higher rate...ie remitting it in chunks straddling the tax year, if possible.

somethingcorporate

Did you not discuss with your accountant prior to doing this? If he was going to land you a huge tax bill by his actions I would have, at the very least, expected him to contact you to discuss.

Laurajo_2

If you did, you may have a potential claim against him.