W88

I’m seeking the best way to optimise my income tax position for the following situation -

I’ve recently been in discussion about potential employment in Qatar. This will be a position where I would be seconded from my current UK employer to a Qatari based entity. The secondment contract will be from a Qatari company, be paid in Qatari Riyal, and salaries be paid into a Qatari bank. The contract is for full time employment, working 50 hours a week, for the 9 months duration.

The start date is planned for first week of April this year and wondering under the Statutory Residence Test, if I would satisfy the Automatic Overseas Test and be exempt from UK income tax?

Following the end of my contract, I would either:

1. Return to the UK after 9 months and continue my employment with my UK employer,
2. Or, wait until after the 5th April 2020 before returning to UK to ensure I was outwith the UK for a full tax year,
3. Or, return to UK after 9 months and not work until after 5th April 2020. This is to ensure I would not be in conflict with being in the UK for ‘fewer than 91 days in the relevant tax year and none of those days are spend working in the UK’.

Under scenarios 2 and 3, can you confirm that my Qatari income will be exempt from UK income tax?

If under Scenario 1, would this qualify for Split Tax year? - and will I only be taxed on my UK income for the remaining months (Jan to March) of the 2019-2020 tax year and have the 9 months Qatari earnings exempt from UK tax ?

It would be good to get some feedback on the above

Thanks in Advance

Johnnyboy11

You need to complete a full tax year overseas as a minimum in order to qualify for any of the Automatic Overseas Tests. From what you've posted you could only pass the first test, assuming you left the UK on or before 5th April 2019 and didn't repatriate before 6th April 2020, and of course limited you days visiting the UK inbetween times. Otherwise you remain UK tax resident and liable for tax on your worldwide earnings, including your Qatar income.

A lot of companies pull the "short assignment to Qatar" trick to get you out there, then your assignement gets a short extension, then a longer extension, then an even longer extension, then...

W88

Thanks for you quick response.

So in theory, should my employment contract stop in January, I could spend the remaining 3 months (up until 6th April 2010) on holiday in a different country and still be exempt from UK income tax? - As long as i don't spend more than 91 days in the UK during any of that time?

Johnnyboy11

Nope. 16 15 days in the UK is the limit for the first Automatic Overseas Test. See RDR3.
Also be careful what happens between stopping work and returning to the UK. If for example you finished work in mid January 2020, left Qatar and returned to the UK for a couple of days then went off on holiday to Spain for the rest of the tax year, HMRC might well argue that you repatriated in mid January, so fail the first test.

W88

Under scenarios 2) and 3), - would this not satisfy the Third Automatic Overseas Test?

Johnnyboy11

Nope, because you would have stopped working full-time overseas part way through the tax year.

Best seek professional advice on your residency status.

Millhouse

yes.

You need to leave before April 4(or whatever) 2019 and go back after april 2020. Thailand is cheap.

Johnnyboy11

Nope, much as the OP might enjoy 3 months on holiday in Thailand, he'd face a tax bill when he arrived back in the UK, in addition to any incidental clinic costs. 15 days tops in the UK for the first Automatic Overseas Test.

OriginalSunshine