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2015-2016 tax year and minimising tax liability

2015-2016 tax year and minimising tax liability

Old Dec 23rd 2014, 11:56 am
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Default 2015-2016 tax year and minimising tax liability

Hi,

I may be taking up a job in the UAE next year.

For tax purposes , to be considered non-UK resident , am I correct in thinking you have to be spending less than 3 months of the year in the UK to not have to pay any income tax ?

If this is the case and I wanted to spend eg. 2 + 2 weeks of holiday in the UK during the course of that financial year, then I would need to commence work in the UAE no later than 6th June. Is this a reasonable assumption to make ?
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Old Dec 23rd 2014, 4:00 pm
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Default Re: 2015-2016 tax year and minimising tax liability

There are plenty of experts on here and many will have a lot more experience than I. However the first place to look is on the Uk government tax site https://www.gov.uk/tax-right-retire-abroad-return-to-uk
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Old Dec 23rd 2014, 4:23 pm
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Aero
Hi,

I may be taking up a job in the UAE next year.

For tax purposes , to be considered non-UK resident , am I correct in thinking you have to be spending less than 3 months of the year in the UK to not have to pay any income tax ?

If this is the case and I wanted to spend eg. 2 + 2 weeks of holiday in the UK during the course of that financial year, then I would need to commence work in the UAE no later than 6th June. Is this a reasonable assumption to make ?
It's 90 days..

Even part days at the airport count as full days.

BUT, having things like kids or a mortgage in the UK could possibly invalidate non-residency status if investigated..

Iv only had this info from reading online and it's not 100%..
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Old Dec 23rd 2014, 5:01 pm
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Tramps_mate
It's 90 days..

Even part days at the airport count as full days.

BUT, having things like kids or a mortgage in the UK could possibly invalidate non-residency status if investigated..

Iv only had this info from reading online and it's not 100%..
I have a mortgage but I'm sure I've read of people working abroad tax free with the purpose of paying off the mortgage.I do have kids and the plan is for them to join me after a few months. I suppose I need to look into it quite thoroughly.
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Old Dec 23rd 2014, 6:28 pm
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Default Re: 2015-2016 tax year and minimising tax liability

I've read about people getting caught out, for example keeping a mortgage and your family living in the house, shows you aren't fully separated from the UK so may be liable for tax. If your family move with you then I guess that's different! Definitely worth more investigation!
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Old Dec 24th 2014, 4:04 am
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Default Re: 2015-2016 tax year and minimising tax liability

You count as resident in the UK if you spend more than 183 days in the Uk in any given tax year and so it is nearer six months.

Even then you only pay tax on that first year if you move back to the UK within 5 years, so you pretty much don't have a problem. I moved out early September 3 years ago and I got over 1000 pound back for the tax man due to PAYE because you get the full years tax allowance even though you are non residence. This also means you do not have to pay tax if you rent your house out.

Just make sure you fill in the correct forms to tell the tax man you are moving abroad.
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Old Dec 24th 2014, 4:18 am
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Default Re: 2015-2016 tax year and minimising tax liability

Ok thanks. The little bit about family remaining in the UK may be relevant to me- although they will come out with me , I may want them to return after 7yrs while I stay on in the UAE for a few more years , by which time I imagine there would be no mortgage. So being liable for tax in the latter years is not something I had envisaged :/
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Old Dec 24th 2014, 4:31 am
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Default Re: 2015-2016 tax year and minimising tax liability

As far as I'm aware your residency status is dependent on you alone and so it does not effect you if your family remain in the UK. Obviously if your wife remains in the UK and works she will be liable to tax until she becomes a non resident.

The information you need is here https://www.gov.uk/tax-foreign-income/residence

You would only be liable for any tax on the earnings in the first year if you spend more than the 183 days in the UK that year and move back to the UK within four years. This is all down to the split year treatment of the first year.

If therefore you plan to stay for seven years you will not have to pay any tax on your UAE earnings..
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Old Dec 24th 2014, 7:50 am
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Jimmy B
As far as I'm aware your residency status is dependent on you alone and so it does not effect you if your family remain in the UK. Obviously if your wife remains in the UK and works she will be liable to tax until she becomes a non resident.

The information you need is here https://www.gov.uk/tax-foreign-income/residence

You would only be liable for any tax on the earnings in the first year if you spend more than the 183 days in the UK that year and move back to the UK within four years. This is all down to the split year treatment of the first year.

If therefore you plan to stay for seven years you will not have to pay any tax on your UAE earnings..
I think there's a difference between non resident and non resident for tax purposes. If more than 90 days in the country you are liable for tax even if non resident status.. I think OP needs to get professional answers to be honest. Iv read a lot on this for my own purpose and that was the conclusion I came to.. Hmmm
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Old Dec 24th 2014, 7:56 am
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Tramps_mate
I think there's a difference between non resident and non resident for tax purposes. If more than 90 days in the country you are liable for tax even if non resident status.. I think OP needs to get professional answers to be honest. Iv read a lot on this for my own purpose and that was the conclusion I came to.. Hmmm
That link is the residence status for tax purposes straight off the Government website.

All I can say is I went through the same thing three years ago and these were the rules then. I moved over in September (half way through the tax year). They apply what they call split year treatment. I have filled in my tax return every year and have not had to pay any tax on my income from AD
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Old Dec 24th 2014, 6:37 pm
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Aero
Hi,

I may be taking up a job in the UAE next year.

For tax purposes , to be considered non-UK resident , am I correct in thinking you have to be spending less than 3 months of the year in the UK to not have to pay any income tax ?

If this is the case and I wanted to spend eg. 2 + 2 weeks of holiday in the UK during the course of that financial year, then I would need to commence work in the UAE no later than 6th June. Is this a reasonable assumption to make ?
Hi, you are currently UK Resident therefore liable for full UK income tax and NI on your worldwide earnings. The quickest way to become UK Non-Resident is to leave the UK and work full-time for at least a full tax-year and limit your visits back to the UK. So the very earliest you can become UK Non-Resident is 6th April 2016, but your non-resident status can be backdated to the day after you left the UK. If you leave and start work overseas on or after April 6th 2015, then it will be 6th April 2017 before you can become UK non-resident, but again can be backdated.

Search online for 'UK statutory residence test flowchart' for the details.
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Old Dec 24th 2014, 7:11 pm
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Default Re: 2015-2016 tax year and minimising tax liability

So maybe spending 2 + 2 weeks of holiday in the UK during the course of the financial year provided I commence work in the UAE no later than 6th June 6th would mean that come April 6th 2016 I could be deemed non-resident and not owe any tax for 2015-2016 , Is this reasonable ?
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Old Dec 24th 2014, 7:13 pm
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Default Re: 2015-2016 tax year and minimising tax liability

But I take the advice , shoukd I speak to an accountant or a tax adviser or are most tax advisers accountants ?
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Old Dec 25th 2014, 7:51 pm
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Aero
So maybe spending 2 + 2 weeks of holiday in the UK during the course of the financial year provided I commence work in the UAE no later than 6th June 6th would mean that come April 6th 2016 I could be deemed non-resident and not owe any tax for 2015-2016 , Is this reasonable ?
Nope.

If you leave the UK on 6th June 2015 to commence full-time employment overseas, then the first opportunity for you to complete the necessary full tax year is 6th April 2016 to 5th April 2017 inclusive. If you don't do this then you are liable for full UK income tax and NI on your worldwide earnings.

As I said previously, working full-time overseas for a complete tax year and limiting your visits back to the UK is a top priority to becoming UK non-resident.

Yes, seek advice from an accountant or tax specialist, but the full-tax-year rule won't change.
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Old Dec 30th 2014, 5:18 am
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Default Re: 2015-2016 tax year and minimising tax liability

Originally Posted by Johnnyboy11
Nope.

If you leave the UK on 6th June 2015 to commence full-time employment overseas, then the first opportunity for you to complete the necessary full tax year is 6th April 2016 to 5th April 2017 inclusive. If you don't do this then you are liable for full UK income tax and NI on your worldwide earnings.

As I said previously, working full-time overseas for a complete tax year and limiting your visits back to the UK is a top priority to becoming UK non-resident.

Yes, seek advice from an accountant or tax specialist, but the full-tax-year rule won't change.
I accept what you have said. There is the split year treatment that applies and would exempt me from tax on UAE earnings before I become deemed non-resident, is there not ?

"When you move in or out of the UK, the tax year is usually split into 2 - a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here. This is called ‘split-year treatment’"

Last edited by Aero; Dec 30th 2014 at 5:29 am.
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