183-Day Rule and Tax Residency

avocado07

Hello, I am a British citizen currently working abroad. Should I inform HMRC that I am working overseas and spending more than 183 days outside the UK? I understand there is a double tax agreement between both countries, allowing me to pay tax only where I earn income. Despite having no income or bank transactions in the UK, I am still paying my mortgage.

MacPingu1986

This really is one where if there's any doubt at all - I'd strongly recommend getting in touch with a tax accountant who can advise, confirm the position (and help with any returns if needed) but very roughly...

The UK doesn't doesn't tax on the basis of citizenship, it taxes on the basis of residency so the test for whether you are liable to pay any UK tax in a tax year (assuming split year treatment doesn't apply) depends if you meet the residency test for the tax year in question. If you do end up being tax resident in two countries (without split year treatment applying), the relevant double tax treaty will usually grant various reliefs so you're not double taxed but these reliefs don't apply automatically - they need to be applied for in your UK tax return and the relevant forms & appendixes being filled out (this is where I found a tax accountant to be invaluable).

Lot's of variables and I'd recommend trawling the HMRC guidance on tax residency, the residence test and split year treatment to see how they all apply to your situation. If split year treatment doesn't apply I found engaging a tax accountant invaluable.

sheramber

Are the more than 183 days in the one tax year?

dean350

You should fill in form P85 to tell HMRC you will no longer be tax resident if you have just started overseas. If they calculate that you have paid too much tax for the part year you will get a refund. If you are a landlord bear in mind you must use an agent and you must do self assessment in respect of any rent received in UK. I would read all rules about making voluntary NI contributions (to keep a UK state pension), whether you can still contribute to ISA's and UK pensions etc. Be especially careful to understand the rules if you repatriate to UK