Working abroad, pay tax?

akcl

Hi all, im currently working abroad and i have around 25k to invest, i was thinking of putting it into a 1 year ebond, is that a good idea?

also, do i have to pay tax on the interest or can i fill out a r85 form?

thanks, any help would be very much appreciated.

akcl

anyone know anything about the r85 form and working abroad?

dubaiscot

Akcl - I am not sure how it works with an ebond, but have you declared yourself as non-uk resident?

If you earn income in the UK, regardless of your living abroad, and that income exceeds your personal allowance (approx 5k per year) you are liable to pay tax on it.

On an investment of 25K I do not think you would exceed that allowance, unless you have other income streams in the UK.

Cook_County

It depends on where you are working & how long you will be absent.

The interest would probably also be taxable in the country where you work.

Jonbvn

You should not fill in form R85, since that is only for non-tax payers. I.e. People whose income is below the relevant threshold (about £5.5k ATM).

Savers who are ‘not ordinarily resident’ (PDF 160K) in the UK can complete form R105 to receive their interest without tax taken off. But not all banks and building societies accept form R105. You will need to check with your own bank or building society.

http://www.hmrc.gov.uk/tdsi/overseas.htm
http://www.hmrc.gov.uk/forms/r105.pdf