dundonald

Hi All

I am (still) in the middle of negotiations over a possible move to work in Sharjah, but a friend of mind who has been working and resident in Dubai sent me a recent letter ,copied from his uk tax accountant,which basically brings in to question the tax free status of uk people working overseas who still have links to the UK. It is based on the Gaines - Cooper trial case and his accountant is saying that any ties to the UK ( housing etc) could mean you will be liable for UK tax on your foreign income.

I am curious if anyone else has recieved similar advice.

I am in a pickle as I would not really want to take a 3 year contract only to find I had to pay UK tax on it...

Comments...

gottheTshirt

If you have an overseas contract of employment for at least a complete tax year then providing you comply with the rules (see section 8.5 of HMRC6c) you will be classified as non taxable on your overseas earnings. The rules relating to breaking all ties in the UK do not apply. You should consultant an accountant specialising in overseas tax liabilities for expats not one who is trying to make a profit out of scaremongering.

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

Meow

The Gaines-Cooper case was as much about domicile as about residency. For the majority of people who are working in the UAE, provided they do not execeed (an average of) 90 days in the UK per tax year they should not have an issue.

The waters are muddied if your family remain in the UK, whilst you are in the UAE, but it depends on the specific details of your own case.

Don't forget that leaving the UK doesn't necessarily mean you have no UK tax liability. It depends on actual date of leaving, how long you remain UK non-resident for tax purposes and whether you have any income arising in the UK.

jackthehat

Let's just face it! - They still want your money! The nice 'Cocker Spaniel' at 'Gatport Airwick' has been trained to 'Sniff-Out Cash!' Despite there being a EU 10,000 Cash Limit, you will be taken one side by the 'Sussex Inquisition' if you have as much as GBP 1,000!

dundonald

Are you sure about what you say,from what I read in the HMRC document its not very clear, especially where you still have family ties in the UK, a house or whatever,Page 10 Example 1 woudl indicate that even if you are on a contract and you remain outside for the required days yuo could still be classed as resident, which means if there is no DTA agreements in place you would be liable for UK tax on your workd wide incomes, and no I dont see this as scaremongering, I am just trying to establish the facts. I agree if you have severed all ties with the UK, dont have immediate family ( kids) living or going to school in the UK and dont visit for more than 90 days you are likely to be ok, but...how many are like that, in my case I would still be keeping my property in the UK and for a while at least my wife woudl not accompany me, and that I think leaves me open to risk.

As a couple of the other replies seem to say ..tax man is getting hungry right now and may try to eat what he can ...

gottheTshirt

I am sure, but you should not be taking advice from me - not unless you want to pay me for it - If you need confidence you need to speak to a specialist tax advisor. The rules are deliberately vague they are not supported by law. The HMRC deliberately makes the guidance unclear to prevent clever lawyers finding a way through. Gains -Copper refers to a multi -millionaire entrepreneur living in the Seychelles but keeping a residence in UK. He was not working on an overseas contract and HMRC are looking to squeeze GBP30 million out of him. Similarly they have their sights on other wealthy celebrities who are trying to play the rules. You will probably find that they are less interested in you. What few realise is that you must have a continuous contract of employment that covers at least a full tax year. You cannot break it and stay overseas on holiday until your next contract. If you do then you may need to demonstrate that you have broken ties with UK. Few of us comply and none of us pay tax. But I am afraid you will not get any consistent advice, confidence or assurance for free from posting on these boards

jackthehat

I have not been a Prisoner of Mother England for some time (1995) When did the Inland Revue and Customs & Exise merge?

typical

April 2005.

Bijilo123

...well yours does not help frankly and more people than ypu think comply.

The rules are not written to be vague they are written to be comprehensive by including tax rules for non-doms. They also allow for interpretation as is right. For example they do not legislate for or against an ex-pats tax liability if his family stays at home. It would be wrong to do so. HMRC are sensible practical people worth engaging!!

In HMRC6 there is no specific exclusion to taking time off between contracts and staying abroad.

The vast majority of tax situations are relatively simple and there is no real need to go to a specialist tax advisor - except to overcome the lack of familiarity with the different circumstances arising from being abroad.

hnd

It's a bit late at night and this may be a bit of a muddled reply but here goes:

Registered for non-residency on 16 June 2005 (day after our flight out of UK) and HMRC automically said it would be 17 June 1005. Have no property in UK so no rental income, had a current account so tax was payable on that - ha ha, way under the taxable limit. Mr hnd has two pensions payable in the UK so still taxable.

Mrs hnd has had no taxable income in the UK for the past two years since all bank accounts were closed (and the piss poor interest rates on bank accounts there were so minimal that they were well under the personal limit anyway) but HMRC has still required her to file a tax return. Hopefully this will not be the case this year.

Mr hnd had also been given an incorrect tax coding which meant that his tax deductions were far in excess of what was required. Did our accountant pick this up? Did he heck. Mr hnd had to call HMRC in the UK personally to get this sorted.

The entire situation may be a can of worms and you simply have to keep on top of it, be aware of your entitlement and what you do need to pay tax on and what isn't taxable.

Bijilo123

Were you drunk when you wrote this?

Meow

1. Or perhaps listen to someone who does this for a living, rather than a project manager/recruitment consultant/oil or gas person/delete as appropriate...

2. Actually you can, but it really is best to listen to someone who knows about these issues rather someone who has read a single HMRC document.