Gibraltar temporary contract - UK resident

carehappy

Hi, I'm moving to Gibraltar in September for a ten month contract before returning to my house in the UK. I'm currently PAYE in the UK and assume I will be PAYE in Gibraltar.

I'm struggling to find any information on tax arrangements as there doesn't seem to be a double taxation agreement between the two.

I've been told mixed information by HMRC and I'm struggling to find information online.

Can anyone please provide guidance on tax arrangements please.

sheramber

http://taxsummaries.pwc.com/ID/Gibraltar-Individual-Foreign-tax-relief-and-tax-treaties

jimmo

You are correct that the UK and Gibraltar do not have a Double Taxation Agreement. That means that the UK will grant Unilateral Relief.
https://www.gov.uk/hmrc-internal-manuals/international-manual/intm161030
In practical terms that means you will be entitled to Double Taxation Relief and the total tax you will have to pay is the higher of the liabilities in each country.
Just to make this more complicated the UK will expect you to legitimately minimize the Gibraltar liability and it seems that Gibraltar has 2 PAYE schemes and it is up to you to select which one.
You need to study:
• Q. I'm commencing employment in Gibraltar, how do I register as an employee?
• Q. How do I know which of the two tax systems is more beneficial for me?
• Q. What allowances am I eligible for? How do I claim them?

From <https://www.gibraltar.gov.gi/income-tax-office/individuals-and-employees/paye&gt;
https://www.gibraltar.gov.gi/income-tax-office/individuals-and-employees/paye

00ec25

you will only be out of the UK for 10 months, therefore, in tax terms, you will remain resident in the UK because you will not have spent and entire tax year (Apr - Apr) outside the UK, so cannot claim split year treatment on the year of departure and year of return, hence Jimmo's post above

you will be taxed by the UK on all your income, including that received in the 10 months in Gib, hence the need to claim unilateral relief against the Gib tax