Overseas income and pensions for non-residents and the UK tax return

debydiver

I've been working outside the UK for 12 years now and have not needed to declare my earnings on my UK tax return.
However, now I'm retired and receive a pension and also some income from savings which will be more than the £2000 limit mentioned in the notes. I'll still be living overseas.
But if I enter the interest and the foreign pension on my UK tax return, the calculation says I have to pay UK tax on them, even though I've not been UK resident for years.

So now I'm confused. It does ask me to enter the figures, but if I do it charges me tax. Should it not notice the boxes that I'm a non-resident and ignore those amounts in the calcs?

Should I NOT enter these amounts on the UK tax return on the basis that they aren't taxable in the UK? I don't want to get in trouble by entering zero for a foreign pension when I do receive one, but at the same time I don't want to pay tax that isn't due.

My country doesn't have a tax agreement with the UK.

Spidernick

What is your nationality and what country are you living in (the two that spring to mind with no tax treaty with the UK are Brazil and the UAE, although quite a few African countries also don't have one either).

The starting point for income arising in the UK (so this wouldn't apply to your earnings) is that it is taxable in the UK, unless it is exempt for some reason (ISAs, for example, not that you are likely to have these as a non-resident), or unless treaty relief is available. That is why the country is important and may ultimately mean that the UK income is taxable here.

Your nationality is important as this may mean you qualify for the personal allowance (£11,500 for 17/18) which might cover your UK income, if taxable. Some treaties may also distinguish between 'residents' and 'nationals' in terms of the treaty and whether treaty relief can apply.

(Ignore the £2,000, as I'm assuming that is the the non-UK income and gains limit for non-UK domiciles who are resident in the UK, so not in point for you).

debydiver

I am British and living in the Cayman Islands.
We don't pay any taxes here, hence although it is a British Protectorate, no tax treaty.

I claim the UK personal allowance against the income I have on my savings in the UK and the property that I let out so I've not paid tax so far.
But with my overseas pension and my overseas interest I'll go over that amount of total worldwide income and tax is being calculated for me.
But as I am non resident I thought that the foreign pension and interest wouldn't be taxed. So should I enter it into the UK tax return or not? There are boxes on the foreign pages for me to enter those numbers but I'm not sure if I am supposed to.

Cook_County

On what UK legal basis do you think you would not owe UK tax?

Sibbers123

If you are not UK resident for tax purposes, then you only put your UK income on your tax return. HMRC have no right to tax foreign income of a non-resident otherwise they would tax everyone...

As a British Citizen, you will be entitled to a UK personal allowance.

debydiver

"Cook_County On what UK legal basis do you think you would not owe UK tax?"

On the basis that I am non-resident and I believe that I should not be paying UK tax on my foreign income.
See here - https://www.gov.uk/tax-foreign-income/residence
"Non-residents only pay tax on their UK income - they don’t pay UK tax on their foreign income."

debydiver

Sibbers123 wrote: »

If you are not UK resident for tax purposes, then you only put your UK income on your tax return. HMRC have no right to tax foreign income of a non-resident otherwise they would tax everyone...
As a British Citizen, you will be entitled to a UK personal allowance.

Ok that seems to make perfect sense. I was confused by the boxes asking for foreign interest and foreign pensions. When I filled it in, I was expecting them to be ignored because I had checked the non-resident boxes. If I don't have to report them at all, then it makes it much simpler. Thank you.
:T

mrschaucer

Spidernick wrote: »

What is your nationality and what country are you living in (the two that spring to mind with no tax treaty with the UK are Brazil and the UAE, although quite a few African countries also don't have one either).
.

Just to avoid future confusion, there is a current tax treaty between the UK and the UAE.
https://www.gov.uk/government/publications/united-arab-emirates-tax-treaties