Help on filing tax return when relocated to another country

am.jovial

This is for a British citizen who was working in UK government service till June 2019. He relocated to Asia and started working there from Aug 2019 (permanent job).
His UK annual salary was well above 50,000 GBP. And, they were receiving Child benefit (of about 20 GBP/week) which was stopped after informing the HMRC about relocation. 
We need help in filing tax return for FY 19-20 on some of these queries :    
1. Worked in UK in April, May, June (3 months) in FY 19-20 and outside UK from Aug 19 onwards.
Does he have to declare the non-UK income (salary, some interest income)?
He is filing tax return in the present country and will be paying tax on the local income. Home country and UK have double taxation avoidance agreement.  
2.  He doesn't have an address in UK now but can use a c/o address (of a friend). Tax return website does allow foreign address.
Which address is better : UK c/o or non-UK present address? 
3. Any other important information that can help us to complete the tax return ? 
We have just started the self-assessment and more we progress more may questions may arise which we will update here.  

Many thanks for the help. 

VXman

Doesn't need to declare non UK income. In fact he will be unlikely to owe any tax as it is only 3 months of income. (£12500 tax allowance at least.)

When I moved abroad to work I didn't do anything. I didn't tell anyone I had left! I was PAYE so had already paid tax which needed to be refunded. I have a gov gateway account and tax details can be done online. I put my bank account details on there and the money was paid directly to my account. I guess if he is filling in as self assessment I assume his situation in UK was more complex than a standard PAYE?

I would give them the correct abroad address to keep things simple but try to do all this online to minimise any snail mail to the foreign address. Why is he paying tax from 19-20 only now?

masonic

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility). Given the DTT, any tax already paid can be set off against a UK liability, but it would still need to be declared.

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

am.jovial

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

masonic

am.jovial said:

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

If he left in June and did not come back to the UK for the rest of the tax year, he may not be tax resident in the UK for 2019/20. Was he in the UK for fewer than 91 days in total in the 2019/20 tax year? Did he work in the UK full time for the 365 days prior to him leaving in June 2019?

It is important to determine tax residence first of all, as the situation will depend on this. See https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

am.jovial

masonic said:

am.jovial said:

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

If he left in June and did not come back to the UK for the rest of the tax year, he may not be tax resident in the UK for 2019/20. Was he in the UK for fewer than 91 days in total in the 2019/20 tax year? Did he work in the UK full time for the 365 days prior to him leaving in June 2019?

It is important to determine tax residence first of all, as the situation will depend on this. See https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

Was he in the UK for fewer than 91 days in total in the 2019/20 tax year?  = yes
Did he work in the UK full time for the 365 days prior to him leaving in June 2019?  = Yes.

masonic

am.jovial said:

masonic said:

am.jovial said:

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

If he left in June and did not come back to the UK for the rest of the tax year, he may not be tax resident in the UK for 2019/20. Was he in the UK for fewer than 91 days in total in the 2019/20 tax year? Did he work in the UK full time for the 365 days prior to him leaving in June 2019?

It is important to determine tax residence first of all, as the situation will depend on this. See https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

Was he in the UK for fewer than 91 days in total in the 2019/20 tax year?  = yes
Did he work in the UK full time for the 365 days prior to him leaving in June 2019?  = Yes.

On that basis, it seems he doesn't meet any of the automatic overseas tests, but does meet the third automatic UK test, and would therefore be considered resident in the UK for the 2019/20 tax year. So he would need to declare his foreign income and any foreign taxes already paid on it.

am.jovial

masonic said:

am.jovial said:

masonic said:

am.jovial said:

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

If he left in June and did not come back to the UK for the rest of the tax year, he may not be tax resident in the UK for 2019/20. Was he in the UK for fewer than 91 days in total in the 2019/20 tax year? Did he work in the UK full time for the 365 days prior to him leaving in June 2019?

It is important to determine tax residence first of all, as the situation will depend on this. See https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

Was he in the UK for fewer than 91 days in total in the 2019/20 tax year?  = yes
Did he work in the UK full time for the 365 days prior to him leaving in June 2019?  = Yes.

On that basis, it seems he doesn't meet any of the automatic overseas tests, but does meet the third automatic UK test, and would therefore be considered resident in the UK for the 2019/20 tax year. So he would need to declare his foreign income and any foreign taxes already paid on it.

So, in Check if you need to send a Self Assessment tax return for the below question, do we have to consider UK + non-UK income?

2. What was your total income for the year?

masonic

am.jovial said:

masonic said:

am.jovial said:

masonic said:

am.jovial said:

masonic said:

VXman said:

Doesn't need to declare non UK income.

Are you sure? I was under the impression that UK residents did need to pay UK tax on their foreign income - I have. The following suggests this is indeed the case: https://www.gov.uk/tax-foreign-income

The OP doesn't give enough information to determine whether the person being discussed is UK resident or not (though 3 consecutive months living and working in the UK, followed by one month unspecified, then the remainder of the year outside the UK, suggests it is a strong possibility).

VXman said:

Why is he paying tax from 19-20 only now?

The deadline for online tax returns for the 2019/20 tax year is 31st January 2021.

Just to give more info, he was always living in UK and hence was a UK resident till he left UK in June 2019. Hope this is sufficient. 

If he left in June and did not come back to the UK for the rest of the tax year, he may not be tax resident in the UK for 2019/20. Was he in the UK for fewer than 91 days in total in the 2019/20 tax year? Did he work in the UK full time for the 365 days prior to him leaving in June 2019?

It is important to determine tax residence first of all, as the situation will depend on this. See https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3

Was he in the UK for fewer than 91 days in total in the 2019/20 tax year?  = yes
Did he work in the UK full time for the 365 days prior to him leaving in June 2019?  = Yes.

On that basis, it seems he doesn't meet any of the automatic overseas tests, but does meet the third automatic UK test, and would therefore be considered resident in the UK for the 2019/20 tax year. So he would need to declare his foreign income and any foreign taxes already paid on it.

So, in Check if you need to send a Self Assessment tax return for the below question, do we have to consider UK + non-UK income?

2. What was your total income for the year?

I was under the impression he had already registered for Self Assessment. If he hasn't, then he's probably missed the deadline to register and complete a return for the 2019/20 tax year, see https://www.gov.uk/self-assessment-tax-returns/deadlines

But yes, total income means total income - from all sources, or as they say in the notes "add up all your income". This will include any foreign income.

am.jovial

Yes he has registered and has been filing tax return all these years. It is complicated this time due to relocation and foreign income.
He is filing tax return in his country for this year and will be paying tax for his income there. I am not sure if there is any provision in UK tax return to declare foreign income, taxed foreign income and untaxed foreign income. 
Do we consider net pay or gross pay of foreign salary? Gross pay = net pay + standard deductions for provident fund/gratuity/pension/PAYE tax etc.  
Also, what is the applicable currency conversion rate ?

masonic

am.jovial said:

Yes he has registered and has been filing tax return all these years. It is complicated this time due to relocation and foreign income.
He is filing tax return in his country for this year and will be paying tax for his income there. I am not sure if there is any provision in UK tax return to declare foreign income, taxed foreign income and untaxed foreign income. 
Do we consider net pay or gross pay of foreign salary? Gross pay = net pay + standard deductions for provident fund/gratuity/pension/PAYE tax etc.  
Also, what is the applicable currency conversion rate ?

The foreign employment income itself should be declared in the employment section like any other job, but foreign taxes should not be included in this section. There is an optional 'foreign' section of the return he will need to add when customising his return, which includes a section for declaring foreign tax paid on employment income. There is a box for entering contributions to an overseas pension scheme in the pensions section of the return (he should check his scheme is eligible for UK tax relief). If he is unclear on the specific values he needs to enter into the relevant boxes of the return, he may be best making use of HMRC's online chat facility, or getting some tax advice.

HMRC publish a series of monthly exchange rates (2019 and 2020) that can be used. There are also per-tax year averages that may be acceptable to save working it out month by month, but that goes beyond my knowledge.

Also, be aware of the possibility of him qualifying for split year treatment, see https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm12000 and links therein. It might reduce the amount of income he has to declare or get him off the hook entirely.