Tax implications when working abroad

JB2690

So I’ve been offered a tax free job in Saudi Arabia for 2 years. I own a property in the UK which I will let but will this give me problems with being classed as “resident”?
When I come back to the UK, do I have to pay tax on my income? Also, am I better to have a bank account in SA or UK or will it not matter? I assume that I can still pay into my pension when away?
Sooo many questions.
Thanks in advance.

01afraser4

According to GOV.UK, if you are UK resident you would need to declare all income earned in the UK or abroad. However, there are various exceptions that would need to be considered (such as if your home 'domicile' is abroad, how many days you spend in the country etc).

I'd suggest getting the help from a qualified agent/accountant would be the best option though.

TheCyclingProgrammer

You may also be required to pay tax in Saudi Arabia from the moment you start working there but you’d need to get professional advice.

As a general rule, income is usually taxed in the country it’s being performed in AND also taxed as worldwide income where you are tax resident if different, subject to any double taxation treaties but local laws may vary.

If you remain tax resident in the UK you will also need to declare and pay tax on any earnings in the UK.

00ec25

2 facts:
a) you are leaving the UK for "2" years
b) You will be receiving a UK income from the let property

you may or may not be outside the UK for a complete tax year , ie 6th April - 5th April
the tax year in which you leave and the tax year in which you return are called "split years"
overall therefore you may, or may not, straddle 3 tax years.
the implications of that are complex, but a background start point is here:
https://www.gov.uk/tax-right-retire-abroad-return-to-uk

the implications of having a UK letting income is you remain liable for UK income tax on that income. But as, I assume you are by origin, a UK citizen, you will be able to claim your personal allowance which may or may not cover your UK tax liability in full. That will not alter even if you remain abroad for a long time.
You may nonetheless need to register for UK self assessment, and must register under the non resident landlord scheme to get the best benefit
https://www.gov.uk/guidance/paying-tax-on-rent-to-landlords-abroad
(Bear in mind, under Housing law your tenants must be given a functional physical UK address at which they can contact you or your representative otherwise legally they do not have to pay you any rent at all)

you should get professional advice for both the above, as it can be quite complex

DREKLY

hi, i let my property whilst working abroad, via a letting agent.
i became a " non resident landlord" and did not need to have any tax witheld ( normally 25% at that time), by the agents.
hmrc advised me that i no longer needed to send tax returns.
i hope that info helps you, good luck !

joeistheone

Continued ownership of the property does not of itself make you continue to be tax resident in the UK. However, even if you are not tax resident in the UK you WILL be liable to UK income tax on any rental profits you make from letting out the property. The UK income tax will be due for each tax year in which the rental profit is made and not when you return to the UK. It does not matter whether you receive the rental income in a UK bank account or a SA bank account from a UK tax perspective. Paying into your pension is more complex, but if you have no relevant UK earnings your pension contributions will be restricted to £2,880 net.

00ec25

DREKLY wrote: »

hi, i let my property whilst working abroad, via a letting agent.
i became a " non resident landlord" and did not need to have any tax witheld ( normally 25% at that time), by the agents.
hmrc advised me that i no longer needed to send tax returns.
i hope that info helps you, good luck !

not sure why you dug this thread up as the OP has never been back.

Your answer is slightly ambiguous since in your case it is not clear why you apparently pay no UK income tax on your rent. The only way that can happen is if the (UK) rental profit is less than your personal allowance. In that case HMRC may have decided it is pointless you doing a tax return as obviously there would be nothing to pay so took you off SA.

DREKLY

00ec25 wrote: »

not sure why you dug this thread up as the OP has never been back.

Your answer is slightly ambiguous since in your case it is not clear why you apparently pay no UK income tax on your rent. The only way that can happen is if the (UK) rental profit is less than your personal allowance. In that case HMRC may have decided it is pointless you doing a tax return as obviously there would be nothing to pay so took you off SA.

Correct, my rental profit was below my personal allowance.

The thread was only opened earlier this month, i felt my details may help the OP, regardless whether he reposted, or just read further posts.