sayhi2debo

Hi,

Please note that I am a British expat working in Saudi Arabia. I left UK on 11 Jul 2015 and submitted the P85 to HMRC accordingly.

At this point of time, there is a chance that I may go back to UK, but am confused with the temporary non residence clause 6 in the HMRC SRT guidelines book -

6. Period of temporary non-residence
6.1 When you return to the UK after a period of temporary non-residence, you may be charged to tax on certain income and gains you received (or remitted to the UK) in that period of temporary non-residence.
Temporary non-residence
6.2 You will be regarded as temporarily non-resident if:

•  following a residence period where you have sole UK residence, 1 or more residence periods occur for which you do not have sole UK residence
•  in 4 or more of the 7 tax years immediately preceding your year of departure you had either;
•  sole UK residence for the tax year, or
•  the year was a split year that included a residence period for which you had sole UK residence, and
•  your period of non-residence is 5 years or less

Note that, for the special rules to not apply, your period of temporary non-residence has to be for more than 5 years; it does not have to be for 5 complete tax years.

Tax when returning to the UK after a period of temporary non-residence
6.11 If you are within the scope of the temporary non-residence rules, you will become liable to tax in the year or part year (in the case of a split year) of your return to the UK on certain of your income and gains:

•  accruing
•  arising, or
•  remitted to the UK

during periods when you were temporarily non-resident. These are considered briefly below.
6.12 You will become liable to tax on:

•  certain pension payments, lump sums and certain other charges
•  income taxable under the disguised remuneration rules
•  remitted foreign income (for remittance basis users)
•  distributions from closely controlled companies
•  loans to participators written off or released
•  chargeable event gains
•  offshore income gains, and
•  capital gains

The temporary non-residence charges for these items will apply as if the income or gain arose in the period that you returned to the UK. The following sections provide more information on the income and gains affected.

So as per the above clause, a period of 5 years outside UK for me as a non resident will end in mid July. Does that mean that if I move back to UK now, before mid July, I will have to pay taxes to the UK government for all money that I have repatriated back to UK from Saudi Arabia, during the time I am working here since mid July 2015?

An expert opinion and guidance on this regard will be much appreciated.

The entire SRT guidance note is also attached for your reference.

Regards,
Debo

FriendlyExpat

I'm not a tax specialist so take this with a pinch of salt, but my understanding is that this is an anti-avoidance rule designed to prevent people temporarily becoming non-resident to avoid certain types of taxes. It is not intended to retrospectively impose income tax on people legitimately working overseas for a period and then returning to the UK.

Funds remitted to the UK are only liable to UK tax under this section if they relate to any of the categories listed in 6.12. 6.12 captures the following kinds of situations: (i) non-doms paying UK tax on the remittance basis and earning income overseas, (ii) income generated by an offshore fund (iii) income paid in the form of a perpetual loan or (iv) other similarly creative tax whizzes.

Regular income earned through working a regular job in the middle east clearly does not fall within 6.12.

As always, if a large amount of tax is contingent on this being correct, I'd recommend speaking to a UK tax adviser before you do anything irrevocable. £100 for a few minutes advice probably worth the peace of mind.

sayhi2debo

Many thanks for the response.

If anybody can give any contact details of a good tax consultant in UK who specializes in expatriates, it would be much appreciated.

FriendlyExpat

I've sent you a PM with the guys I use and a couple of other people recommended to me (I don't have any financial interest with any of them). You can also get other recommendations here: https://www.moneysavingexpert.com/sa...cial-advisers/

sayhi2debo

Thank you FriendlyExpat for your help, much appreciated.