UK Income Tax
Feb 17th 2008, 9:40 am
#46
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Re: UK Income Tax
Naturally any interest arising on this money in the UK is taxable, which is where an offshore account is beneficial to expats. In reality, offshore accounts are of more use to UK Residents with overseas earnings they intend to keep offshore.
Feb 17th 2008, 9:46 am
#47
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Re: UK Income Tax
Surely that only applies if you are classed as Resident. If you are Non-Resident, income earned outside the UK is non-taxable, even if you send it to the UK. This is clear in R & C SA109 and Notes on SA109.
Naturally any interest arising on this money in the UK is taxable, which is where an offshore account is beneficial to expats. In reality, offshore accounts are of more use to UK Residents with overseas earnings they intend to keep offshore.
Naturally any interest arising on this money in the UK is taxable, which is where an offshore account is beneficial to expats. In reality, offshore accounts are of more use to UK Residents with overseas earnings they intend to keep offshore.
Feb 17th 2008, 9:50 am
#48
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Re: UK Income Tax
It is just that the rate is zero.
Feb 17th 2008, 9:54 am
#49
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Re: UK Income Tax
This is the danger - you are abroad in a zero tax regime and you save 100k and put it offshore - it seems that you can only bring in 5k a year to spend when you return home!!
This is where you have to be clever and use your offshore account to pay travel expenses, tickets and so on just to minimise the amount you have on retirement.
Nowadays you cannot even disguise remittances because the offshore bank has to tell the Government.
The conclusion is that disposable income is taxed at UK rates!!
This is where you have to be clever and use your offshore account to pay travel expenses, tickets and so on just to minimise the amount you have on retirement.
Nowadays you cannot even disguise remittances because the offshore bank has to tell the Government.
The conclusion is that disposable income is taxed at UK rates!!
Feb 17th 2008, 9:55 am
#50
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Feb 17th 2008, 10:23 am
#51
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Re: UK Income Tax
If you look at Revenue and Customs sheet Notes on SA109, Table 1:
http://www.hmrc.gov.uk/worksheets/sa109-notes.pdf
If you are Non-Resident and Non-Domiciled in the UK, you are not liable to UK income tax on earnings from a foreign employer for employment performed wholly outside the UK.
To be considered Non-Domiciled, you have to show strong evidence that you intend to remain overseas indefinitely - this is where the real grey area probably begins!
Interestingly, Table 4, if you are self employed you need only be Non-Resident, Domicile does not come into it.
http://www.hmrc.gov.uk/worksheets/sa109-notes.pdf
If you are Non-Resident and Non-Domiciled in the UK, you are not liable to UK income tax on earnings from a foreign employer for employment performed wholly outside the UK.
To be considered Non-Domiciled, you have to show strong evidence that you intend to remain overseas indefinitely - this is where the real grey area probably begins!
Interestingly, Table 4, if you are self employed you need only be Non-Resident, Domicile does not come into it.
Feb 17th 2008, 10:27 am
#52
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Re: UK Income Tax
If you look at Revenue and Customs sheet Notes on SA109, Table 1:
http://www.hmrc.gov.uk/worksheets/sa109-notes.pdf
If you are Non-Resident and Non-Domiciled in the UK, you are not liable to UK income tax on earnings from a foreign employer for employment performed wholly outside the UK.
To be considered Non-Domiciled, you have to show strong evidence that you intend to remain overseas indefinitely - this is where the real grey area probably begins!
Interestingly, Table 4, if you are self employed you need only be Non-Resident, Domicile does not come into it.
http://www.hmrc.gov.uk/worksheets/sa109-notes.pdf
If you are Non-Resident and Non-Domiciled in the UK, you are not liable to UK income tax on earnings from a foreign employer for employment performed wholly outside the UK.
To be considered Non-Domiciled, you have to show strong evidence that you intend to remain overseas indefinitely - this is where the real grey area probably begins!
Interestingly, Table 4, if you are self employed you need only be Non-Resident, Domicile does not come into it.
I have given a load of information about domiciles earlier in this thread. Suggest you look at that if you want info.
Feb 18th 2008, 11:36 am
#53
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Re: UK Income Tax
does that mean that if you worked in say sweeden where the tax rates are huge that when you bring the money back in the UK government will give you the difference back? if so i'm moving to sweeden!
Feb 18th 2008, 11:42 am
#54
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Feb 18th 2008, 11:48 am
#55
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Re: UK Income Tax
Meow, you are just the person I need to speak to!
I phoned the tax office before leaving the UK who told me it was ok to send money to my UK bank account to pay my mortgage (my home in unoccupied) etc.
However after reading this I visited their site too and it seems this information is wrong!
Can you tell me more on paying tax on money I send home? I'm VERY worried now.
I phoned the tax office before leaving the UK who told me it was ok to send money to my UK bank account to pay my mortgage (my home in unoccupied) etc.
However after reading this I visited their site too and it seems this information is wrong!
Can you tell me more on paying tax on money I send home? I'm VERY worried now.
Are you able to leave enough money to cover the mortgage in your UK account before you leave (up to the end of the next tax year)?
Feb 19th 2008, 3:07 am
#56
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Re: UK Income Tax
Meow - you seem to have a good understanding on all this tax stuff - perhaps you can shed some light on this...
My wide and I left the UK in July 06 to move to Australia. We kept our UK property to rent out for a year.
Moved to Dubai from Australia in August 07, and sold the our UK property. We transferred the equity after the sale of the property to our bank here and used it as equity when we bought a property here in Dubai.
We have filled in all the forms for non-residency. As it has been less than 5 years, we are classed as temporarily non-resident for taxation purposes.
Now, say for example we returned to the UK in July 09 which would still be less than 5 years. We would have equity from the sale of the property here. This equity would be the equity that we took from the UK, plus what we make on our property here.
If we returned to the UK, we would obviously use this equity to buy a house there.
Our question is, what is the position with this money and getting it back to the UK - We are not sending tax free earnings from Dubai, just equity from the sale of our primary residence.
How do we get this to the UK, and is it taxable? Our property here is our primary residence. We do not have property elsewhere. Our UK property was sold to buy this property.
What's the most tax-effective way to do this?
Thanks
Mike
My wide and I left the UK in July 06 to move to Australia. We kept our UK property to rent out for a year.
Moved to Dubai from Australia in August 07, and sold the our UK property. We transferred the equity after the sale of the property to our bank here and used it as equity when we bought a property here in Dubai.
We have filled in all the forms for non-residency. As it has been less than 5 years, we are classed as temporarily non-resident for taxation purposes.
Now, say for example we returned to the UK in July 09 which would still be less than 5 years. We would have equity from the sale of the property here. This equity would be the equity that we took from the UK, plus what we make on our property here.
If we returned to the UK, we would obviously use this equity to buy a house there.
Our question is, what is the position with this money and getting it back to the UK - We are not sending tax free earnings from Dubai, just equity from the sale of our primary residence.
How do we get this to the UK, and is it taxable? Our property here is our primary residence. We do not have property elsewhere. Our UK property was sold to buy this property.
What's the most tax-effective way to do this?
Thanks
Mike
Feb 19th 2008, 3:47 am
#57
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Re: UK Income Tax
Meow - you seem to have a good understanding on all this tax stuff - perhaps you can shed some light on this...
My wide and I left the UK in July 06 to move to Australia. We kept our UK property to rent out for a year.
Moved to Dubai from Australia in August 07, and sold the our UK property. We transferred the equity after the sale of the property to our bank here and used it as equity when we bought a property here in Dubai.
We have filled in all the forms for non-residency. As it has been less than 5 years, we are classed as temporarily non-resident for taxation purposes.
Now, say for example we returned to the UK in July 09 which would still be less than 5 years. We would have equity from the sale of the property here. This equity would be the equity that we took from the UK, plus what we make on our property here.
If we returned to the UK, we would obviously use this equity to buy a house there.
Our question is, what is the position with this money and getting it back to the UK - We are not sending tax free earnings from Dubai, just equity from the sale of our primary residence.
How do we get this to the UK, and is it taxable? Our property here is our primary residence. We do not have property elsewhere. Our UK property was sold to buy this property.
What's the most tax-effective way to do this?
Thanks
Mike
My wide and I left the UK in July 06 to move to Australia. We kept our UK property to rent out for a year.
Moved to Dubai from Australia in August 07, and sold the our UK property. We transferred the equity after the sale of the property to our bank here and used it as equity when we bought a property here in Dubai.
We have filled in all the forms for non-residency. As it has been less than 5 years, we are classed as temporarily non-resident for taxation purposes.
Now, say for example we returned to the UK in July 09 which would still be less than 5 years. We would have equity from the sale of the property here. This equity would be the equity that we took from the UK, plus what we make on our property here.
If we returned to the UK, we would obviously use this equity to buy a house there.
Our question is, what is the position with this money and getting it back to the UK - We are not sending tax free earnings from Dubai, just equity from the sale of our primary residence.
How do we get this to the UK, and is it taxable? Our property here is our primary residence. We do not have property elsewhere. Our UK property was sold to buy this property.
What's the most tax-effective way to do this?
Thanks
Mike
My thoughts
I think you are confusing things. The money you send back to the UK is not income. Full stop. But, it is a remittance and thus also subject to tax if it comes from income. But, it derives from taxed income not untaxed income so has already been taxed. That is the argument I would use. (Watch out for CGT though if it was a rental house)
Also you state that
we are classed as temporarily non-resident for taxation purposes
There is no such thing. You are NOT ordinarily resident in the UK - that is your 'status'. Residence and tax status are not the same thing although they may be highly correlated. Tax is to do with income and residency is to do with - where you live.
If you have any savings that you take back to the UK at the end of all this then it may be these are subject to tax on remittance. - I may be wrong though.
Congrats on selling the UK house - it will be cheaper to buy it when you return. Hope the DXB house appreciates.
Last edited by Old Lob; Feb 19th 2008 at 3:51 am. Reason: missed a crucial word and thus talked bollocks - may be gernarally doing so though..
Feb 19th 2008, 4:00 am
#58
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Re: UK Income Tax
Thanks for the info.
I got the temp non-resident bit off the HMRC website...
Wonder what the special rules are... Special Rule 1. Pay more tax than normal as you got more sunshine than everyone else in the UK got!?!?! 
Rental house... in the UK we lived in the house, and when we moved to Aus we rented it for 12 months. We then sold it before we moved here, and it was our only property. I am sure there is something about primary residency that means CGT is not applicable?
I need a tax manual, that is written in normal speak! Reading through the HMRC site it looks like each section is written by someone else, and at a different time so none of it flows together well!
I got the temp non-resident bit off the HMRC website...
Temporary non-residence
8.4 If you have left the UK and dispose of assets while you are temporarily non-resident, special rules may apply for gains that would have been chargeable, and losses that would have been allowable, if you had been resident or ordinarily resident in the UK for the tax years in question. You are 'temporarily' non-resident if you have been neither resident nor ordinarily resident in the UK for fewer than five complete tax years.
8.4 If you have left the UK and dispose of assets while you are temporarily non-resident, special rules may apply for gains that would have been chargeable, and losses that would have been allowable, if you had been resident or ordinarily resident in the UK for the tax years in question. You are 'temporarily' non-resident if you have been neither resident nor ordinarily resident in the UK for fewer than five complete tax years.
Rental house... in the UK we lived in the house, and when we moved to Aus we rented it for 12 months. We then sold it before we moved here, and it was our only property. I am sure there is something about primary residency that means CGT is not applicable?
I need a tax manual, that is written in normal speak! Reading through the HMRC site it looks like each section is written by someone else, and at a different time so none of it flows together well!
Feb 19th 2008, 4:01 am
#59
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Joined: Dec 2007
Location: Doha
Posts: 535
Re: UK Income Tax
This is a useful web page on the subject:
http://www.direct.gov.uk/en/MoneyTax...UK/DG_10026136
Also
http://www.direct.gov.uk/en/MoneyTax...UK/DG_10027480
Reading these along with SA109 I link to above, I still am of the opinion that if you are Non-Resident, you pay no tax on overseas earnings, even when you send it to the UK. I can see no references to the contrary. Indeed, if you are Non-Resident, when you compile your UK tax return you do not have to declare your overseas income and there is no route for declaring money sent to the UK from such.
Any reference to tax on money remitted to the UK is for UK Residents who have overseas income they bring in to the UK.
http://www.direct.gov.uk/en/MoneyTax...UK/DG_10026136
Also
http://www.direct.gov.uk/en/MoneyTax...UK/DG_10027480
Reading these along with SA109 I link to above, I still am of the opinion that if you are Non-Resident, you pay no tax on overseas earnings, even when you send it to the UK. I can see no references to the contrary. Indeed, if you are Non-Resident, when you compile your UK tax return you do not have to declare your overseas income and there is no route for declaring money sent to the UK from such.
Any reference to tax on money remitted to the UK is for UK Residents who have overseas income they bring in to the UK.
Feb 19th 2008, 4:07 am
#60
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Re: UK Income Tax
Regarding your house sale.
The 5 year Non-Residence rule is to do with CGT. Basically if you are Non-Resident for 5 or more years you are exempt CGT for any transactions you undertake whilst remaining Non-Resident.
Less than 5 years you have to pay CGT, but as you state there is no CGT on a primary residence.
The 5 year Non-Residence rule is to do with CGT. Basically if you are Non-Resident for 5 or more years you are exempt CGT for any transactions you undertake whilst remaining Non-Resident.
Less than 5 years you have to pay CGT, but as you state there is no CGT on a primary residence.