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Abu Dhabi resident, UK tax liability?

Abu Dhabi resident, UK tax liability?

Old Jul 6th 2009, 2:38 pm
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Default Abu Dhabi resident, UK tax liability?

Hi there,

I have been living and working in Abu Dhabi since 7th November 08 and will be here until at least November 09. I have a UAE residence visa. I am British and lived in England for my whole life before coming out here. I will find out in November 09 whether my contract will be renewed. I am hopeful that it will be, and if so then it will be for either a further year or two years at a time.

Will I be liable for UK income tax on my earnings if I return to the UK in November, as I will not have stayed out of the country for a full tax year? I think the answer to this is yes, so if this is true then I would choose to stay out of the country until after April 09; is this enough? Can I avoid UK income tax by simply remaining out of the UK, or do I have to be employed as well? Could I just go travelling? I have no real ties to the UK, no property, just an upcoming NHS appointment which I would cancel if it threatened my non-resident status. I was planning on attending the appointment during a week's holiday in the UK later this month, and apart from that I have only spent one day in the UK since last year. I am 27. My salary is $80k and my allowances (housing, car, utilities) are about the same again. I have not yet filled in form P85.

Will I be able to avoid tax on all my earnings out here if I stay long enough, or will I always be liable for the Nov 08 - April 09 portion as I was in the UK for over 183 days out of the 08-09 tax year (i.e. between April and November 08)?

Also I have just read some old threads about sending money back to the UK. As my housing allowance is paid monthly but my housing contract required a year's rent up front, I transferred savings from the UK at the start of the year and then paid them back more recently, plus a bit extra for some remaining credit card bills. Will I have to pay UK income tax on the money I have sent back to the UK?

Thanks very much in advance for any help or guidance.
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Old Jul 6th 2009, 4:00 pm
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Default Re: Abu Dhabi resident, UK tax liability?

Meow will no doubt have the chapter and verse answer, but you have to be out of the UK for a full tax year (employed or not) if you don't want to pay tax on any earings during that time - although you can spend up to 90 days in the Uk during any tax year. As you are out Nov to Nov, you straddle two tax years, so will need to be out of the UK till 6 April 2010 if you dont want to have a tax liability for your earnings from 6 April 2009.

Your earnings up to 5 April 09 are likely to be taxable as you elude to re 183 days, but best get a tax advisor/accountant to advice. There may be a way out....
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Old Jul 6th 2009, 4:59 pm
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Default Re: Abu Dhabi resident, UK tax liability?

I think it may be best if Meow has her own thread on this subject.
It seems to be popping up a lot these days this subject of UK Tax.
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Old Jul 7th 2009, 9:22 am
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by eightwayliz View Post
Hi there,

I have been living and working in Abu Dhabi since 7th November 08 and will be here until at least November 09. I have a UAE residence visa. I am British and lived in England for my whole life before coming out here. I will find out in November 09 whether my contract will be renewed. I am hopeful that it will be, and if so then it will be for either a further year or two years at a time.

Will I be liable for UK income tax on my earnings if I return to the UK in November, as I will not have stayed out of the country for a full tax year? I think the answer to this is yes, so if this is true then I would choose to stay out of the country until after April 09; is this enough? Can I avoid UK income tax by simply remaining out of the UK, or do I have to be employed as well? Could I just go travelling? I have no real ties to the UK, no property, just an upcoming NHS appointment which I would cancel if it threatened my non-resident status. I was planning on attending the appointment during a week's holiday in the UK later this month, and apart from that I have only spent one day in the UK since last year. I am 27. My salary is $80k and my allowances (housing, car, utilities) are about the same again. I have not yet filled in form P85.

Will I be able to avoid tax on all my earnings out here if I stay long enough, or will I always be liable for the Nov 08 - April 09 portion as I was in the UK for over 183 days out of the 08-09 tax year (i.e. between April and November 08)?

Also I have just read some old threads about sending money back to the UK. As my housing allowance is paid monthly but my housing contract required a year's rent up front, I transferred savings from the UK at the start of the year and then paid them back more recently, plus a bit extra for some remaining credit card bills. Will I have to pay UK income tax on the money I have sent back to the UK?

Thanks very much in advance for any help or guidance.
The short answer as many of us know is that if you're away for less than a tax year you will be liable for income tax, regardless of weather you send money home or try to keep in hidden in an offshore account, under the mattress etc.

The longer answer is you should fill out a P85 form as soon as possible - go to www.hmrc.gov.uk/cnr to download online. This can be submitted online too I think.

It's true you need to be outside the UK for a full tax year to be sure you're not liable for income tax but as mentioned fill out the form regardless...if you end up staying until next April you may even qualify for a tax rebate on the basis that you have paid too much income tax in the months prior to your departure.

If you have a UK property you might want to consider taking advantage of the Non-Resident Landlord's Scheme as well - this allows you to recieve your rental income gross of tax. There's a form for this at the same website.

Hope that helps - feel free to drop me a PM if you have any other questions.

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Old Jul 8th 2009, 6:15 am
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Default Re: Abu Dhabi resident, UK tax liability?

Actually you can spend up to 91 days in a tax year in the UK and remain non-resident. You do not have to be out for a full tax year.


I am not really answering these queries in any depth right now as I have other things to do and get little or no thanks for it. Just a load of negative comments from too many people here. I really don't know why I should bother to help people out - for free - to get all that in return.

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Old Jul 8th 2009, 7:15 am
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by Meow View Post
Actually you can spend up to 91 days in a tax year in the UK and remain non-resident. You do not have to be out for a full tax year.


I am not really answering these queries in any depth right now as I have other things to do and get little or no thanks for it. Just a load of negative comments from too many people here. I really don't know why I should bother to help people out - for free - to get all that in return.

-
True!! there are toooooooooooo many think they know it all. people should do some research first before they ask simple and stupid questions.
please folk use the search engine on here there is a wealth of good info on this site.
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Old Jul 8th 2009, 10:11 am
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Default Re: Abu Dhabi resident, UK tax liability?

Sorry to have ruffled any feathers. I have done loads of research and think I know where I stand, but wanted to check for sure. Extensive searching of this website led me to the conclusion that Meow was the person with all the answers (among others, but Meow really stood out) and I was impressed that in 3000+ posts it's all helpful, not-for-profit stuff that seems to be out of pure generosity. I joined the forum so that I could PM Meow and ask to talk, either online or in person, and I would be happy to pay for this. However this forum does not allow me to send a PM until I have at least 3 posts. So I posted instead, and am posting again now as this is still only my second post so I STILL can't PM!

Meow, I would very much welcome your advice, either on here or in private. I had been asking friends for recommendations of someone useful to talk to but got nowhere, so in the absence of a personal recommendation you stand out due to the quality and content of your many previous posts.

Coffindodger, sorry if any of my questions were stupid or that I appeared not to have done my own research. I THINK I know plenty about this topic, but thought it better to put in all relevant info in case I was missing something.
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Old Jul 8th 2009, 11:08 am
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Default Re: Abu Dhabi resident, UK tax liability?

Just write some quick posts. i.e.

Post 1 etc

Everyone else does.
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Old Jul 8th 2009, 11:39 am
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by eightwayliz View Post
Sorry to have ruffled any feathers. I have done loads of research and think I know where I stand, but wanted to check for sure. Extensive searching of this website led me to the conclusion that Meow was the person with all the answers (among others, but Meow really stood out) and I was impressed that in 3000+ posts it's all helpful, not-for-profit stuff that seems to be out of pure generosity. I joined the forum so that I could PM Meow and ask to talk, either online or in person, and I would be happy to pay for this. However this forum does not allow me to send a PM until I have at least 3 posts. So I posted instead, and am posting again now as this is still only my second post so I STILL can't PM!

Meow, I would very much welcome your advice, either on here or in private. I had been asking friends for recommendations of someone useful to talk to but got nowhere, so in the absence of a personal recommendation you stand out due to the quality and content of your many previous posts.

Coffindodger, sorry if any of my questions were stupid or that I appeared not to have done my own research. I THINK I know plenty about this topic, but thought it better to put in all relevant info in case I was missing something.
Sorry i wasnt getting at you its folk in general that come on ask silly questions with out doing any research first.
sorry if i sounded and may have offended you but my comments as i have said were not aimed at you.
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Old Jul 8th 2009, 12:41 pm
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Default Re: Abu Dhabi resident, UK tax liability?

Sorry for the pointless post, need 3 to even read a PM that someone else has sent!
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Old Jul 10th 2009, 2:29 pm
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by eightwayliz View Post
Hi there,

I have been living and working in Abu Dhabi since 7th November 08 and will be here until at least November 09. I have a UAE residence visa. I am British and lived in England for my whole life before coming out here. I will find out in November 09 whether my contract will be renewed. I am hopeful that it will be, and if so then it will be for either a further year or two years at a time.

Will I be liable for UK income tax on my earnings if I return to the UK in November, as I will not have stayed out of the country for a full tax year? I think the answer to this is yes, so if this is true then I would choose to stay out of the country until after April 09; is this enough? Can I avoid UK income tax by simply remaining out of the UK, or do I have to be employed as well? Could I just go travelling? I have no real ties to the UK, no property, just an upcoming NHS appointment which I would cancel if it threatened my non-resident status. I was planning on attending the appointment during a week's holiday in the UK later this month, and apart from that I have only spent one day in the UK since last year. I am 27. My salary is $80k and my allowances (housing, car, utilities) are about the same again. I have not yet filled in form P85.

Will I be able to avoid tax on all my earnings out here if I stay long enough, or will I always be liable for the Nov 08 - April 09 portion as I was in the UK for over 183 days out of the 08-09 tax year (i.e. between April and November 08)?

Also I have just read some old threads about sending money back to the UK. As my housing allowance is paid monthly but my housing contract required a year's rent up front, I transferred savings from the UK at the start of the year and then paid them back more recently, plus a bit extra for some remaining credit card bills. Will I have to pay UK income tax on the money I have sent back to the UK?

Thanks very much in advance for any help or guidance.
Only the HMRC or at least a tax accountant / lawyer can answer you with any degree of certainty. I'm not either so treat everything I say with contempt.

06 April 2008 - 05 April 2009 - you are tax-resident in the UK because of 183 day rule.

Tax-resident in the UK usually means you pay tax on all income, where ever it is from, for the whole year (notwithstanding exemptions for double-taxation which won't apply for the UAE, and non-domiciled UK residents which you're not based on what you've said).

06 April 2009 - 05 April 2010 - you will be tax-resident for the whole year if you return before 06 April 2009 + 183 days (06 October 2009?). You might be if you return after that date - in my opinion assume yes unless HMRC tells you otherwise, since you were tax resident the previous year and won't have been non-resident for a full tax year.

You won't pay tax on money you send back because you're sending it back, you will pay tax on interest you earn from that money. You will also pay tax if that money was income, whether or not you send it back.

Here's some relevant bits from the HMRC6 pdf (where they say "normally" is where a tax accountant might be able to find a way to reduce your liablity if you can be abnormal).

In all cases when you are physically present in the UK for 183 days or more, you will be resident here in that tax year. There are no exceptions to this.

-

You will normally be resident in the UK for the whole of a tax year.

-

When you are resident in the UK you are normally taxed on the 'Arising
Basis of Taxation' and you will pay UK tax on:
• any of your income which arises in the UK, and
• any of your income which arises outside the UK, and
• any gains which accrue on the disposal of assets anywhere in the world.
In summary, you will probably have a big tax bill for 2008-2009 because of your UAE income and benefits, and you should stay out of the UK until after April 2010 at least (or January if you want to take a risk on the 91 day exemption) to have a chance of avoiding tax for 2009-2010. Your NHS appointment probably won't have much effect unless those days put you on the wrong side of the 91 days rule.

Last edited by grapefruit; Jul 10th 2009 at 2:30 pm. Reason: Fix quote tags
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Old Jul 10th 2009, 9:01 pm
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Default Re: Abu Dhabi resident, UK tax liability?

Correction to my previous post. There's something called an extra statutory concession A11. If I understand it correctly, it might mean you don't pay UK tax on your UAE income in the year which you depart from the UK and the year you return to the UK, but I'd check with the tax department and/or an adviser about that.
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Old Jul 12th 2009, 8:29 am
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by grapefruit View Post
Correction to my previous post. There's something called an extra statutory concession A11. If I understand it correctly, it might mean you don't pay UK tax on your UAE income in the year which you depart from the UK and the year you return to the UK, but I'd check with the tax department and/or an adviser about that.
*shakes head*

A little knowledge is a very dangerous thing.

That is not correct.

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Old Jul 12th 2009, 2:04 pm
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Default Re: Abu Dhabi resident, UK tax liability?

Originally Posted by Meow View Post
*shakes head*

A little knowledge is a very dangerous thing.

That is not correct.

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Stop giving them free advice...

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