Help on filing tax return when relocated to another country

am.jovial

@masonic
Thank you so much for the detailed, clear reply that is so useful. I really appreciate your time and effort here to help me out. 
When we calculate both UK and no-UK gross income at the current exchange rate, the total income is still coming slightly less than 50,000 GBP for FY 19-20. So the HMRC 'Check if you need to send a Self Assessment tax return' tool says 'You do not need to send a Self Assessment tax return'. 

masonic

am.jovial said:

@masonic
Thank you so much for the detailed, clear reply that is so useful. I really appreciate your time and effort here to help me out. 
When we calculate both UK and no-UK gross income at the current exchange rate, the total income is still coming slightly less than 50,000 GBP for FY 19-20. So the HMRC 'Check if you need to send a Self Assessment tax return' tool says 'You do not need to send a Self Assessment tax return'. 

What is your answer to Question 5:

"Do you need to pay tax on any of the following?

- Income from a trust
- Income from outside the UK
- £2,500 or more in commission or cash in hand payments
- A payment or charge on a private pension
- None of these"

If you know that there is no tax payable on the foreign income (for example if you know that the double taxation agreement will give full tax relief on any UK liability he would otherwise have had), then he could inform HMRC he does not need to complete a tax return (if it's not too late), and would not have a requirement to declare it under PAYE if there is no tax due. He must apply to be let off completing his tax return, just not completing it when he is enrolled in self-assessment will end up in penalties being applied. If he fills out a return, he would be required to give details of all of his income.

However, if you select the 'income from outside the UK' option, then the questionnaire should tell you he needs to complete a tax return.

am.jovial

masonic said:

am.jovial said:

@masonic
Thank you so much for the detailed, clear reply that is so useful. I really appreciate your time and effort here to help me out. 
When we calculate both UK and no-UK gross income at the current exchange rate, the total income is still coming slightly less than 50,000 GBP for FY 19-20. So the HMRC 'Check if you need to send a Self Assessment tax return' tool says 'You do not need to send a Self Assessment tax return'. 

What is your answer to Question 5:

"Do you need to pay tax on any of the following?

- Income from a trust
- Income from outside the UK
- £2,500 or more in commission or cash in hand payments
- A payment or charge on a private pension
- None of these"

If you know that there is no tax payable on the foreign income (because you have performed your own tax calculation and it makes no difference to the result whether it this income is included or not, or you know that the double taxation agreement will give full tax relief on any UK liability), then he could inform HMRC he does not need to complete a tax return (if it's not too late), and would not have a requirement to declare it under PAYE if there is no tax due. He must apply to be let off completing his tax return, just not completing it when he is enrolled in self-assessment will end up in penalties being applied.

However, if you select the 'income from outside the UK' option, then the questionnaire should tell you he needs to complete a tax return.

We selected 'none of these'. If we select 'Income from outside the UK', it is asking to file the tax return. 
As suggested by you, we will have to find out more details on the double taxation etc. 

masonic

am.jovial said:

masonic said:

am.jovial said:

@masonic
Thank you so much for the detailed, clear reply that is so useful. I really appreciate your time and effort here to help me out. 
When we calculate both UK and no-UK gross income at the current exchange rate, the total income is still coming slightly less than 50,000 GBP for FY 19-20. So the HMRC 'Check if you need to send a Self Assessment tax return' tool says 'You do not need to send a Self Assessment tax return'. 

What is your answer to Question 5:

"Do you need to pay tax on any of the following?

- Income from a trust
- Income from outside the UK
- £2,500 or more in commission or cash in hand payments
- A payment or charge on a private pension
- None of these"

If you know that there is no tax payable on the foreign income (because you have performed your own tax calculation and it makes no difference to the result whether it this income is included or not, or you know that the double taxation agreement will give full tax relief on any UK liability), then he could inform HMRC he does not need to complete a tax return (if it's not too late), and would not have a requirement to declare it under PAYE if there is no tax due. He must apply to be let off completing his tax return, just not completing it when he is enrolled in self-assessment will end up in penalties being applied.

However, if you select the 'income from outside the UK' option, then the questionnaire should tell you he needs to complete a tax return.

We selected 'none of these'. If we select 'Income from outside the UK', it is asking to file the tax return. 
As suggested by you, we will have to find out more details on the double taxation etc. 

I would strongly suggest looking into the split-year eligibility I mentioned in an earlier post too, either of these could be your salvation.

am.jovial

We called HMRC and explained the situation in detail. They were very quick to tell us we don't need to file the tax return for FY 19-20 !! That is heaven. 
Now, we forgot to check if we can get the refund for the tax already collected for the 3 months. We will soon call again asking about it. 
Thank you everyone who helped us here. Really appreciate it.   

masonic

am.jovial said:

We called HMRC and explained the situation in detail. They were very quick to tell us we don't need to file the tax return for FY 19-20 !! That is heaven. 
Now, we forgot to check if we can get the refund for the tax already collected for the 3 months. We will soon call again asking about it. 
Thank you everyone who helped us here. Really appreciate it.   

If he's registered for Self Assessment and you've established he doesn't need to declare the income from his new employment (presumably due to a split year), then it might be easiest for him to complete a tax return, which will show whether he's owed any money (he probably is owed money), and allow him to have it repaid. The alternative will be to go through the same process over the phone to HMRC or write them a letter, but this is probably more hassle than just completing a return.

Johnnyboy11

There's a Form R85 that you can submit online to tell HMRC that you've permanently left the UK, then no need to contact them again, unless you still have ongoing UK earnings like rental income. His UK Non-Residency status is provisional at present and won't be confirmed until 6th April 2022 at the earliest. He can still make Class 3 NICs to keep building his UK State Pension, and might be entitled to pay £2,880 into a UK Private Pension this year and the next four, and get free basic tax relief at 20%. He made good decision to leave the UK, and I expect there will be many more economically active Brits doing likewise in the years to come.