Tax Question on Remittance
 

Hi All,

I'm planning to move out to UAE in March and was wondering how British Tax works on Remittance

Do I need to pay UK tax on money I send back to UK even if i'm a non resident?

I've been researching on off-shore bank accounts like HSBC in the channel islands. Are they classed as sending money back to the UK?

If not, would it be liable for remittance if I send money from channel island to UK mainland?

Also, if im non-resident do I still get my UK tax allowance for my UK rental property?

Hope you can help :)

Re: Tax Question on Remittance
 

See above...

Re: Tax Question on Remittance
 

Hi Dubaiguy,

Are you saying I will need to pay income tax on income derived in UAE or only the money I send back derived from UAE?

Re: Tax Question on Remittance
 

Dubaiguy said No to your second question. By No I think he means means No

If you are in UAE on a contract of employment lasting a full tax year then you do not need to pay UK income tax on your earnings no matter where thay are paid or how you remit the money to UK.

Re: Tax Question on Remittance
 

Hi, you pay full UK tax and NI on all your worldwide earnings, unless you qualify for HMRC's concessions. Easiest for you is to become 'UK Non-resident' by leaving the UK to work full time under a full time employment contract for a full tax year and limiting your visits back to the UK (See HMRC6 Section 8.5). There's also a split year concession which means your UK Non-residency is backdated to the day you left the UK.

So you need to be in the UAE 'till 6th April 2014 to have any chance of becoming UK Non-resident and therefore tax and NI free.

[J]

Re: Tax Question on Remittance
 

I will be non-resident and will be submitting all relevant forms to HMRC and starting in March. This is a long contract that I have in UAE and therefore not planning to go back anytime soon if at all if I like the life style.

What i'm trying to gather is there any rules on remitting money and tax implications in UK when you are a non-resident. I still have properties in the UK and therefore may need to send money home to pay off the mortgage.

Re: Tax Question on Remittance
 

Read what I wrote carefully. Being physically non-resident does not mean you are 'NON-RESIDENT' for UK tax and NI purposes. If you don't complete a full tax year, you will owe UK income tax and NI contributions on every last penny you earn in the UAE, whether you remit it to the UK or squander it on on a new Porsche and brunches.

Re: Tax Question on Remittance
 

The answer is there are rules, but , without complicating the answer, if you have a contract of employment lasting a full tax year then you do not pay UK tax on money that you send back to UK

Re: Tax Question on Remittance
 

Thanks Gotthetshirt, That is what I need to know. My contract is long term and therefore easily pass one financial year.

Johnnyboy, I did read your post and I think you mistook what I was writing.

I understand the tax residency status and do not think that simply leaving the country makes me non-resident. I have considered the HMRC requirements and would qualify to be non-resident.

All I wanted to find out was the specific rules/tax implications on moving money to UK from UAE income to pay my mortgage.

Thanks for your reply.

Re: Tax Question on Remittance
 

On a slightly different question,

My contract is a 3 year contract and renewable. Is this a standard length since I was expecting something like UK where there is no contract length and just exists until its terminated by either party.

Re: Tax Question on Remittance
 

It's like an on-off switch (UK Resident/ UK Non-Resident). Your switch will be on until 6th April 2014, but will be retrospectively backdated to the day you left the UK. If you can tick that box, then it doesn't matter what you do with your earnings, they are all UK Tax/NI free.

This is harder than you might think, the sponsorship system and employment rights in the UAE are not in your favour...

Re: Tax Question on Remittance
 

Be careful about how much time you spend physically present in the UK !

If you are in the UK for long periods of time (over 90 days in a tax year ?) you would be deemed to be resident with liability to tax on earnings.

Re: Tax Question on Remittance
 

There are no UK rules. I have worked on contracts where I am paid in the Uk.. If you meet the non resident status rules, which you will, providing your contract covers the tax year and you do not spend more than 90 days per year in UK (may be 180 days in one year providing you do not average more than 90 days a year over 4 years but this rule is due to change so is not relevant) then you can do whatever you like with your money. You can remit it all to UK.

Re: Tax Question on Remittance
 

A bit irrelevant : I presently have a 10 month contract that is coming up to 2 years. I have had 5 year contracts that have lasted 6 months and permanent contracts that have never started. A short contract may allow you to negotite if they want to keep you or allow them to get rid of you if they do not but whatever you have no security.

Re: Tax Question on Remittance
 

Thanks for the answer, I completely understand and nothing is certain and in the area I work in, stability is never a given but I wanted to understand if its normal to not have permanant contracts.