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Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax?

Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax?

Old Feb 5th 2013, 9:22 pm
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by The Dean
I can just imagine the entire population of Lagos currently thinking up all combination of "Luke.Graves@......" e-mail addresses to write to, asking for his 'help'.......
It'd provoke more interest posting it here:

https://www.facebook.com/ukuncut?fref=ts
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Old Feb 5th 2013, 10:45 pm
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

If you're selling a business / idea then surely you're running it through a ltd co or sole trader and will only be liable for 22% anyway?

You're getting away with a half-rate there so just accept that as a bonus.
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Old Feb 6th 2013, 2:27 am
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Luke, you get 100% income tax relief on pension contributions, so you could sink the whole lot into a SIPP before the end of this tax year and pay zero tax. Down side is that it is tied up until you reach age 55. Up side is that you pay no income tax (did I just mention that?), can take 25% of the pot tax-free at age 55 and the rest as an income (annuity or drawdown) which will be taxed at your marginal rate (probably 20%). Plug the numbers in here, to find the optimum pension contribution needed to cancel out higher rate tax.

Setting up a Limited Company and selling your assets from within is another option. Then you can choose when to take a dividend or salary from the Company to suit your own tax affairs. Worth checking with an Accountant to make sure the Company is properly set up. You also have far less protection if the deal goes sour.

Forgot to mention, also beware capital gains tax if you are selling an asset. Don't know much about this, sorry.

Last edited by Johnnyboy11; Feb 6th 2013 at 2:36 am.
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Old Feb 6th 2013, 4:15 am
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

To be tax free you either have to leave uk with a contract of employment for a full tax year or you have to LEAVE UK. The HMRC definition of LEAVE is that you cut off all ties.

It is people like you who attempt to use the non resident rules for tax evasion that has made life difficult for the genuine expat workers. So don't expect help from this board.
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Old Feb 6th 2013, 5:22 am
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

But genuine professional advice costs MONEY !

Damn cheapskate !
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Old Feb 6th 2013, 5:57 am
  #21  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Send it to me and I'll stick it my account then bring it back to blighty for you less 10% handling fee
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Old Feb 6th 2013, 8:28 am
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

I have friends in Lagos who would be interested in doing business with the OP.
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Old Feb 6th 2013, 10:32 am
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by Meow
You can't and you also don't qualify as UK non-resident simply by leaving the UK to sit on a beach somewhere.
Really?! Surely as long as you are out of the UK for the required period then you become non-resident for tax purposes?
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Old Feb 6th 2013, 1:08 pm
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by Jackwow
Really?! Surely as long as you are out of the UK for the required period then you become non-resident for tax purposes?
Nope, you need to become UK non-resident in terms of HMRCs rules and there are only two ways that you can to do this.

Either leave the UK to work overseas on a full-time employment contract and complete at least a full tax year and limit visits to the UK (A Split-Year concession can be granted to back-date your tax free status to the day after you left the UK).

or

Leave the UK permanently or indefinitely (for at least 3 tax? years) and establish a new life overseas, cutting all ties with the UK (family home, banks, etc.) and again limit visits to the UK.

Otherwise you remain UK resident and your worldwide earnings are fully liable to UK Income Tax and NI.


See HMRC6 for the detail (likely to be superseded by new rules this year, where 'connecting factors' and 'days in the UK' will become more important).

It's harder than you might think to become UK non-resident...

Last edited by Johnnyboy11; Feb 6th 2013 at 1:15 pm.
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Old Feb 6th 2013, 8:15 pm
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by Johnnyboy11
Nope, you need to become UK non-resident in terms of HMRCs rules and there are only two ways that you can to do this.

Either leave the UK to work overseas on a full-time employment contract and complete at least a full tax year and limit visits to the UK (A Split-Year concession can be granted to back-date your tax free status to the day after you left the UK).

or

Leave the UK permanently or indefinitely (for at least 3 tax? years) and establish a new life overseas, cutting all ties with the UK (family home, banks, etc.) and again limit visits to the UK.

Otherwise you remain UK resident and your worldwide earnings are fully liable to UK Income Tax and NI.


See HMRC6 for the detail (likely to be superseded by new rules this year, where 'connecting factors' and 'days in the UK' will become more important).

It's harder than you might think to become UK non-resident...
It's a legal minefield and one only one or two people on this bored with necessary qualifications and expertise can answer, seems every case could be different. Obviously answered the OP question as they haven't been back.
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Old Feb 6th 2013, 10:06 pm
  #26  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by Jackwow
Really?! Surely as long as you are out of the UK for the required period then you become non-resident for tax purposes?
You think I make this shit up?
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Old Feb 12th 2013, 10:20 pm
  #27  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

I paid income tax until I left the UK at the end of September 2012. I have no mortgage, property, business, spouse, children etc in the Uk. The only thing I have is a bank account (which my UAE income is NOT paid into) which is simply there for things like direct debits with O2 for a pre existing phone contract.

When is the earliest I could move back to the UK on a perm basis without having to back pay tax on all my overseas earnings both this and next tax year? Am I reasonable in thinking that if I do not visit the UK during the next tax year then it would be around January 2014? (full tax year - 90 days).

It is ridiculously complex! Why not just have a transparent system so everybody knows where they stand!
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Old Feb 12th 2013, 10:47 pm
  #28  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by paulieg6
I paid income tax until I left the UK at the end of September 2012. I have no mortgage, property, business, spouse, children etc in the Uk. The only thing I have is a bank account (which my UAE income is NOT paid into) which is simply there for things like direct debits with O2 for a pre existing phone contract.

When is the earliest I could move back to the UK on a perm basis without having to back pay tax on all my overseas earnings both this and next tax year? Am I reasonable in thinking that if I do not visit the UK during the next tax year then it would be around January 2014? (full tax year - 90 days).

It is ridiculously complex! Why not just have a transparent system so everybody knows where they stand!
The UK system is actually quite clear compared to those in other countries and is not as harsh as many either.

The new Statutory Residency Test makes it even clearer for most, although you should note that the 90 day rule is not applicable to everyone from 06/04/13.

You should remain out the the UK for a full tax year 6th April to 5th April to be considered non-resident for tax purposes. Overseas income in partial years may still be subject to UK oncome tax, depending on specific circumstances.



New post on the Statutory Residency Test is up for anyone who is interested (and an awful lot of people have been so far) : http://financialuae.me/2013/02/12/in...esidency-test/
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Old Feb 13th 2013, 2:26 am
  #29  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Originally Posted by paulieg6
I paid income tax until I left the UK at the end of September 2012. I have no mortgage, property, business, spouse, children etc in the Uk. The only thing I have is a bank account (which my UAE income is NOT paid into) which is simply there for things like direct debits with O2 for a pre existing phone contract.

When is the earliest I could move back to the UK on a perm basis without having to back pay tax on all my overseas earnings both this and next tax year? Am I reasonable in thinking that if I do not visit the UK during the next tax year then it would be around January 2014? (full tax year - 90 days).

It is ridiculously complex! Why not just have a transparent system so everybody knows where they stand!
The earliest you could move back is 6th April 2014 (assuming of course that you left the UK to work under a full-time employment contract and work for at least a full tax year i.e. 6th April 2013 until 5th April 2014). See HMRC6 Section 8.5 for the details.
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Old Feb 13th 2013, 2:33 am
  #30  
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Default Re: Does a 'grace period' exist to move to Dubai, to save having to pay UK income tax

Having read a few things I am convinced it would be January as everyone (even 'non residents') get 90 days? January plus 90 days equals April 14?
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