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If you are considering, or are working overseas already, there are various factors to consider when determining your exposure to UK tax.
You will need to determine your UK tax residency status. To do this, you will need to look at the following
Keeping a travel diary will prove to be very helpful to you as it’s easy to confuse dates especially when moving around. Accurate records could save you time when dealing with HMRC at a later stage.
After considering all in detail, you will either be UK tax resident or non resident. Special rules can apply in the year that you are leaving and returning to the UK allowing you to “split” the year in to an overseas part and UK part.
For as long as you are considered UK tax resident, your worldwide income and gains will be taxable in the UK.
For non-residents, only income earned in the UK and gains from a UK residential property are taxable in the UK. If however, you are non resident for less than 5 consecutive tax years, all gains in the period of non residency will be brought back into charge in the year you become resident again.
The income that you earn in the capacity as a crown servant will be liable to UK tax regardless of your UK tax residency status and where your duties are performed – so even if in a single tax year you’ve spent fewer than 16 nights in the UK, although you will be considered automatically non-UK tax resident, the income earned will still be taxable in the UK. It’s important to be aware that this does not follow the ordinary rules for individuals working abroad.
You may be considering letting out your property in the UK whilst you are abroad. If so, you will need to declare the rental income on your personal tax return. You will also need to register with HMRC as a non-resident landlord. This will entitle you to receive your rental income without any taxes withheld. By not registering, your letting agent will be obligated to withhold tax at 20% and forward this to HMRC.
It’s important also to plan for your return to the UK in advance to ensure that you are as tax efficient as possible. If you have worked across multiple jurisdictions, or own property overseas, the situation could be even more complex.
We recommend that if you have any doubts you seek professional advice, please contact us for assistance.
Please contact us for advice on the tax considerations of working overseas. We shall respond to you shortly
Jane is a qualified Chartered Tax Adviser and Chartered Accountant. She has over 20 years’ experience providing tax advice, planning and compliance services to High Net Worth individuals, families and Trustees.
Jane advises on a wide range of areas but specialises in:
Sarah is a qualified Chartered Accountant and Chartered Tax Adviser. She has worked at Alliotts for ten years, after a career change from teaching. She started in our audit and accounts teams, before transferring to our tax team in 2018. Her role involves a variety of taxes and areas: personal and corporate tax advisory; individual, companies and trusts compliance.
She is carving out a niche in advising on tax and international mobility, perhaps inspired by a letter about her own position during a stay in China.
Gerry is a Chartered Tax Advisor and Fellow of the Association of Taxation Technicians. He has over 30 years of experience in all aspects of private client tax. Gerry works with a wide range of clients, including high net worth individuals in all areas of personal tax including compliance and tax planning.
Gerry has expertise in the taxation of private businesses and partnerships, all aspects of personal income (including UK and non-UK landlords) and capital gains, and inheritance tax matters.
In addition, Gerry has a special expertise, coupled with extensive experience, of advising our clients about the implications of tax residency and domicile matters according to individual and personal circumstances in order to enable tax efficient outcomes.
Gerry is recognised for his ability to build strong relationships with his clients to really understand what is important to them and their families, which enables the best possible support and advice that works for the long term. He takes a proactive approach and provides our clients with clear advice on the complex UK tax rules as they impact their financial transactions.
Gerry also works with colleagues across the world through connections in our international network, Alliott Global Alliance when there are cross-border issues.