Tax residency HRMC and ATO.
 

I have been in Australia nearly two years, before we left the UK; we left some money in a fixed rate bond with the Nationwide B/S in the UK. I have been declaring interest earned to the ATO as part of my Ozzy tax return. I have also been claiming back tax paid on the interest to the HRMC, through using my personal allowance in the UK. Its matures in the next few weeks, and the interest I have earned since April 5th 2013 will be claimed back through my UK personal allowance, so in essence the interest was tax free in the UK, as it never amounted to over my personal threshold allowance. This monies will be declared to the ATO as unearned income from overseas, no problem there. When the money becomes available this month, I intend to move it into my off shore account with the Nationwide. So my interest will be paid gross from then on. I will declare this interest payment to the ATO as I am an Australian resident for tax purposes….
What I want to know is when my money is offshore, with Nationwide International in the Isle of Man. Do I have to disclose this interest to the HRMC? When I claim back my personal UK allowance? Am I a UK resident for tax purposes or not? I have read up and I think I am no longer a UK resident for tqax purposes, the rules changed in April this year. So as long as I declare all overseas income to the ATO, as I am a Ozzy resident for tax purposes I am fine…..So I think I can claim back all interest earned between April 5th 2013 to October 2013, utilizing my personal UK allowance, then receive all interest gross from my savings account offshore as I am a Ozzy resident for tax purposes….Then settle up with the ATO in July 2014, when I declare offshore income from my savings account….Am I correct?

Re: Tax residency HRMC and ATO.
 

Does this help?

http://www.hmrc.gov.uk/offshoredisclosure/isleofman.htm

There's a 10 page memorandum of understanding between HMRC and Isle of Man which can read for further information:

www.hmrc.gov.uk/news/lsle-of-man-disclosure.pdf‎

There is also a 19 page document on UK/Isle of Man tax information exchange agreement and arrangement amending the 1955 double taxation
bill:

http://www.hmrc.gov.uk/taxtreaties/t...man-eol.pdf‎

If you can't find the answers there then I would suggest paying for a professional advisor familiar with UK/Australian tax. I'm not sure whether an expert will come along and give you advice for free but you might hope for someone who has been in the same situation coming along!;)

(P.S. A prize to anyone else who read that word for word! You start a new paragraph with the big key marked Enter or Return and two spaces before a new sentence helps.):lol: (cheeky, yep!)

Re: Tax residency HRMC and ATO.
 

If you are no longer U.K. tax resident then you are only taxable in the U.K. on U.K. sourced income. Normally, your personal allowance covers this (British citizens and some others keep the personal allowance). So your first step is to work out have you lost your U.K. tax residence or not.

Isle of Man income does not normally count as U.K. sourced.

Regardless, you must declare and pay Australian tax if you are Australia tax resident unless you meet the conditions for certain temporary residents to exclude certain non-Australian income.

Re: Tax residency HRMC and ATO.
 

Cheers JAJ.

HMRC have said you can claim up to 2167 pounds sterling back as savings interest up to April 5th 2014. This can be claimed on any sourced interest in the UK. So savings accounts based in the UK. Accounts offshore in the Isle of Man are not UK source savings accounts, they are offshore and pay interest free of savings tax. This interest has absolutely noting to do with the HMRC as long as you, well i qualify for non UK residency, which i do, as i am an Australian resident for tax purposes as i have left the UK for good. Been out the UK for nearly two years and have no ties apart from the fixed rate bond which is maturing. Any interest i recieve off shore must be disclosed to the ATO come July 2014.

So from April 5th 2013 to October 2013, all tax paid on interest in the UK, can be claimed back via my personal allowance as long as its under 2167 that i am claiming back. From October 2013, as long as i remain a Australian resident and not a UK resident. All interest from my offshore account will be paid gross, no savings tax taken, and this must be disclosed to the ATO come July 2014. That is the info i have been given from what i would deem a relieable source?

Re: Tax residency HRMC and ATO.
 

Unclear what you mean by this. If U.K. income tax has been deducted (by the bank) from interest, and you have no U.K. tax liability you may be able to claim a repayment from HMRC. However, you would usually have to file a tax return.


Correct. As for a reliable source, why not use HMRC and ATO online information as your reliable source?

Re: Tax residency HRMC and ATO.
 

http://www.hmrc.gov.uk/rates/it.htm

Personal Allowance for people born after 5 April 1948 £9,440

Starting rate for savings: 10%* £0- £2,790

20% of £9,440 = £1888.00

10% of £2,790 = £279.00

Total - £2167.00

So as long as i did not receieve more than £10835.00 in interest, tax year 13 to 14 and recieved no other income in the UK then the total allowance kicks in, even for non residents like me.

Any interest earned off shore is out of the HMRC juristriction, as long as i am a non resident, which i am. The ATO will want to know though..

Re: Tax residency HRMC and ATO.
 

Of course. Note that not every non-resident is entitled to the personal allowance. British citizens are, but (for example) a sole Australian citizen would normally not be.

Also note that if the bank deducts 20% tax, you will have to file a U.K. tax return in order to reclaim it.

If you are earning GBP10,000 in interest your wealth level is enough that you should be taking professional tax advice, in general.

Re: Tax residency HRMC and ATO.
 

Yep, i am a British Citizen so can claim, you do not need to do a tax return, just fill out a R43.

http://www.hmrc.gov.uk/forms/r43-2013.pdf

Gross interest not even near that figure above, i wish:frown: