ExPat76

Hi

I'm not sure if this is the right place to post this but I'm going round and round in circles trying to work out if I'm UK resident or not. I've been living abroad outside of the UK since Feb 2013, and I spent 67 days in the UK in the last tax year, and 44 days in the UK in this tax year. What's complicating things is that I'm not working at all (I moved abroad to be with my husband who is working), and that we still own our house in the UK which is where we stay when we are back for visits there.

If I use a flowchart to work through the Statutory Residence Test it tells me I'm non-UK resident (which makes sense to me), but if I use the HMRC online residence indicator it tells me that I am a UK resident. But if I try the test to show if it's a split year (i.e. I'm the partner of someone working abroad) then it tells me I'm non-resident that year, then resident the next tax year It's so confusing! I tell the online residence indicator that I'm not working - should I tell it that I am working even though it's not me but my husband who is working?

Does anyone know of someone I could contact to get a definitive answer on this? Thank you!

ExPat76

I have no idea why residence is spelt incorrectly in the title - it's meant to be residence!

The reasons I'm stressing about this is I don't know whether or not I can contribute to mine or my children's ISA this tax year. My husband definitely isn't tax-resident, he has help sorting this out from an accountancy firm thanks to his work. However, they aren't able to help me and so I'm trying to work it out for myself.

Pollyana

I think you might get more response if I move the thread to our UK forum

I'll fix the title too!

ExPat76

Ah I've got it sorted now. I am not tax resident under the 2nd automatic UK test bit as although we have our UK home we also have a home where we're currently living. Which is what the 'ordinarily resident' has now become.

As I am non-UK resident, I still have to pay tax on UK income e.g. interest from savings accounts - is that right? And is it right that I lose my personal allowance, so I will have to pay tax even though my income is under £10,000? Do I have to send off any forms to tell the HMRC that I'm no longer resident?

Thanks!

quiltman

Depends what country you are in as to whether you lose your personal allowance. Look here, find your country and see what the agreement says;

https://www.gov.uk/government/public...with-uk-income

Here we get both the personal allowance and the annual pension increase.

mikemike

Ty for that I was as confused as could be:

We may purchase a home in the Uk but retain our full time residence in the Philippines, that way I will not be considered as ordinarily UK resident for tax purposes. I think it means I can visit the Uk for a maximum of 90 days per tax year, without being deemed as Uk resident for tax purposes.? or have I got this wrong as well

quiltman

Yes and No! If you buy a UK property and it is available for you to use when in UK , then HMRC can class you as resident for tax purposes. The 90 days is not counted , it's the fact you own property. You would have to let it for at least 12 months, and use a letting agent, plus meet the 90 day rule.
Have a look here, scroll down to UK Property:
Lowtax - Global Tax & Business Portal | Related Information - Non-Resident Taxation

Pistolpete2

Sorry that I didn't respond to you on the other thread but I was getting stuck in a great deal of detail and was concerned at trying to call a home something other than what it is.

Being tax resident in the Philippines has no bearing upon tax residency in the UK in of itself. In actual fact one could be tax resident in several jurisdictions at the same time.

Indeed, after the first year of this routine of having a UK home which you use while also having an overseas home which you use for over 30 days -

You can return to the UK for 120 days, you are then allowed 90 days in the UK on the next visit (if its within two tax years) before you become tax resident because you have two ties: a 90 day tie because you stayed in the UK for 90 days in one of the previous two tax years and an accommodation tie because you have somewhere to stay there as a home or other accommodation which you have actually used.

It is obviously important that you and your partner/spouse travel together or structure travel to the UK as if one of you becomes tax resident in the UK, then when the other visits there is an existing family tie and this brings the allowance down to 46 days.

Note that the term ordinarily resident has now disappeared - you are simply resident for UK tax purposes and this is now the same case for income and capital gains tax. Inheritance tax is based upon domicile and resident but non-domiciled also allows the option to be taxed under the remittance basis which is helpful if you have a large (rest of the) World income which you don't want to be subjected to UK tax.

Pistolpete2

I really don't think that it is as complex as that - I do appreciate it is most unfortunate that there is disagreement when the OP etc. need advice.

In the situation covering UK property, the UK taxpayer (such as the very wealthy Guy Hands who was trying to get out of the UK tax radar by moving on his own to the Channel Islands - leaving his family in the UK and not visiting them) is leaving the UK and trying to convince the Revenue (HMRC) that they have properly severed ALL ties post the Gaines-Cooper tax debacle.

The Statutory Residence Test (SRT) has properly codified the whole arrangement of connections to the UK, at last, so that the previous paranoia as a result of Gaines-Cooper is no longer necessary and HMRC has even gone to the lengths of giving examples to cover almost every conceivable residence scenario in the SRT rules, whether leaving or arriving in the UK. Before the SRT, every individual case was open to interpretation by HMRC, often of course depending upon how big a fish you are.

If you are wealthy and trying to artificially create the aura of non-residence for future tax avoidance purposes as opposed to living overseas for many many years with no UK connections whatsoever up to now, that is a whole different ball game.

What is not clear is the amount of record-keeping and back-up paperwork that is necessary to support disclosures under HMRC self-assessment. Do we keep boarding passes, copies of leases, blah blah blah, just in case??? How many self-assessment filings which involve large property gains that are not chargeable due to non-residence get audited?

mikemike

So the UK home would not be seen as a holiday home. Which in effect it would be as we are both overseas residents, have been for many years.

Looks like we will have to wait, capitalize all investments to cash in the tax year prior to returning to the UK. Following tax year which is year of return, remit the now cash balance and buy a house, at same time start the Spouse visa application. What a palaver.

Perhaps me being generous to a fault I should just let my wife buy the UK property in her name, non resident, non domiciled. she has no taxable income or gains