Offered 8-9 months transfer to Abu Dhabi
May 9th 2013, 5:57 pm
#1
Just Joined
Thread Starter
Joined: May 2013
Posts: 3
Offered 8-9 months transfer to Abu Dhabi
Hi,
I've searched through the treads that are related to 'avoiding tax' but I am still not very clear if I am eligible for tax free while I stay in Abu Dhabi.
Basically my company currently has a personnel in Abu Dhabi (construction site) who is going to have her maternity leave for around 8 months and the company is looking for someone who can cover her. Because it's a short period of time I am thinking of leaving my wife and my kids (attending schools) in the UK.
One of my colleages who spent several years in Abu Dhabi suggested me to open a local bank account and receive the salary there to get the benefit of tax-free.
However, looking at the tax related threads, it seems I have to be away during the whole financial year to claim tax free? It's already May and I will probably be able to be in Abu Dhabi in the begining of July, then this is already be around 90 days stay in the UK within this tax year.
Does it mean that I cannot expect any tax benefit regardless of where I have my bank account? To be honest there is less point of me being Abu Dhabi in that case because my family might end up spending more money than what we do now. (My salary will be paid to my UK bank account 'after tax' and my wife will have to pay rent, utilities, transport, etc, but on top of that I will have to withdraw monies in Abu Dhabi from my UK bank account, paying exchange commissions.
Is my understanding correct? Please help me. I don't know much about tax...
I've searched through the treads that are related to 'avoiding tax' but I am still not very clear if I am eligible for tax free while I stay in Abu Dhabi.
Basically my company currently has a personnel in Abu Dhabi (construction site) who is going to have her maternity leave for around 8 months and the company is looking for someone who can cover her. Because it's a short period of time I am thinking of leaving my wife and my kids (attending schools) in the UK.
One of my colleages who spent several years in Abu Dhabi suggested me to open a local bank account and receive the salary there to get the benefit of tax-free.
However, looking at the tax related threads, it seems I have to be away during the whole financial year to claim tax free? It's already May and I will probably be able to be in Abu Dhabi in the begining of July, then this is already be around 90 days stay in the UK within this tax year.
Does it mean that I cannot expect any tax benefit regardless of where I have my bank account? To be honest there is less point of me being Abu Dhabi in that case because my family might end up spending more money than what we do now. (My salary will be paid to my UK bank account 'after tax' and my wife will have to pay rent, utilities, transport, etc, but on top of that I will have to withdraw monies in Abu Dhabi from my UK bank account, paying exchange commissions.
Is my understanding correct? Please help me. I don't know much about tax...
May 9th 2013, 6:48 pm
#2
Lost in BE Cyberspace
Joined: May 2008
Posts: 5,125
Re: Offered 8-9 months transfer to Abu Dhabi
yes you do have to be out of the country for a whole tax year, so as a new one has just started you will need to do 1 and nearly another 1 to be eligible but of course if you move to another country etc you can still make up your nearly 2 years.
May 10th 2013, 10:29 am
#3
Just Joined
Thread Starter
Joined: May 2013
Posts: 3
Re: Offered 8-9 months transfer to Abu Dhabi
Does it mean that I cannot get any tax benefit in this financial year no matter how soon I leave the UK (to ensure I don't stay more than 90 days in the UK within this financial year), just because I didn't manage to leave before 1 April? I am not planning to be separate from my family for more than a year so staying another 1 year in Abu Dhabi for tax benefit is not an option.
Sounds like this opportunity might not be a financial benefit but the other way round if I am not careful, as my family might end up spending more money, both in the UK and Abu Dhabi.
May 10th 2013, 1:23 pm
#4
Onwards and Upwards!
Joined: Sep 2010
Posts: 884
Re: Offered 8-9 months transfer to Abu Dhabi
Thanks BusyBee2,
Does it mean that I cannot get any tax benefit in this financial year no matter how soon I leave the UK (to ensure I don't stay more than 90 days in the UK within this financial year), just because I didn't manage to leave before 1 April? I am not planning to be separate from my family for more than a year so staying another 1 year in Abu Dhabi for tax benefit is not an option.
Sounds like this opportunity might not be a financial benefit but the other way round if I am not careful, as my family might end up spending more money, both in the UK and Abu Dhabi.
Does it mean that I cannot get any tax benefit in this financial year no matter how soon I leave the UK (to ensure I don't stay more than 90 days in the UK within this financial year), just because I didn't manage to leave before 1 April? I am not planning to be separate from my family for more than a year so staying another 1 year in Abu Dhabi for tax benefit is not an option.
Sounds like this opportunity might not be a financial benefit but the other way round if I am not careful, as my family might end up spending more money, both in the UK and Abu Dhabi.
Remember you'll have high living expenses in AD, so think very carefully before you commit. On the other hand, you would get some valuable overseas experience which will help you find permanent work in the Middle East e.g. Qatar will be booming for the next decade on their World Cup '22% programme.
See HMRC6 Section 8.5:
8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become
not resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at
least a whole tax year
• you have actually physically left the UK to begin your employment
abroad and not, for example, to have a holiday until you begin your
employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years.
May 11th 2013, 9:58 am
#5
Just Joined
Thread Starter
Joined: May 2013
Posts: 3
Re: Offered 8-9 months transfer to Abu Dhabi
As stated above, you need to work overseas for a complete tax year to become UK non resident, so this tax year won't count. But if you do complete a full tax year working overseas (6th April 2014 - 5th April 2015), then you can be granted a split year concession for this tax year so all your time overseas could be tax free.
Remember you'll have high living expenses in AD, so think very carefully before you commit. On the other hand, you would get some valuable overseas experience which will help you find permanent work in the Middle East e.g. Qatar will be booming for the next decade on their World Cup '22% programme.
See HMRC6 Section 8.5:
8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become
not resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at
least a whole tax year
• you have actually physically left the UK to begin your employment
abroad and not, for example, to have a holiday until you begin your
employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years.
Remember you'll have high living expenses in AD, so think very carefully before you commit. On the other hand, you would get some valuable overseas experience which will help you find permanent work in the Middle East e.g. Qatar will be booming for the next decade on their World Cup '22% programme.
See HMRC6 Section 8.5:
8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become
not resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at
least a whole tax year
• you have actually physically left the UK to begin your employment
abroad and not, for example, to have a holiday until you begin your
employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years.
May 11th 2013, 12:42 pm
#6
Lost in BE Cyberspace
Joined: May 2008
Posts: 5,125
Re: Offered 8-9 months transfer to Abu Dhabi
i would say they should be looking for someone who is local in the country anyways, you have to be out of the country for 1 tax year, and as you are already part the way through it you will need to be out of the country for nearly 2 years and then you can still be liable because of the new residency rules coming in. abu dhabi is not a cheap place to be.
