UK Income Tax
Dec 1st 2008, 11:02 am
#121
Bored liberal
Joined: Feb 2007
Location: Over there ----->
Posts: 13,713
Re: UK Income Tax
I havent worked in the UK this tax year but have received a redundancy payment below the 30,000 taxable level. I am working in Dubai on a temp contract which I suspect will end at the end of December as I work in property and dont expect to be kept on. I was considering returning to the UK. Am I right in thinking that I wont be taxed on the income I have earned here as I will still be under the maximum number of days this tax year? - Much of what I have earned is in an off shore account now. I havent yet declared myself non resident in the UK as I wasnt sure if I would work or not in Dubai (and made a mess of the form and decided I could leave it until I go back there in December for christmas - not anticipating the property downturn here).
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Dec 1st 2008, 11:12 am
#122
Forum Regular
Joined: Dec 2008
Posts: 47
Re: UK Income Tax
Thanks for that Miaow - I would never have fathomed that from the available info. It means I will need to come back here for at least 23 days which helps me decide whats best to do.
Dec 1st 2008, 12:32 pm
#123
Just Joined
Joined: Dec 2008
Posts: 3
Re: UK Income Tax
Ok based on the previous members post, I am in a similar situation whereby I will be moving to Dubai in January 2009 with my family.
Having copied the list of items from the previous threads I would like to confirm my understanding.
(1)- To get real benefit of Tax free salary you have to work for atleast 1 Tax year. i.e. if from 6th of April to 5th of April of following year. but if you start lets say in Jan. 2009 then you have to work till 5th of April of 2010 to be classified as full tax year.
-- Does this mean I would have to pay UK tax from January 2009 to April 2009?
(2)- you must not spend more than 90 days on average over 4 years in UK
-- This I will not be doing since when I move I am expected to stay for at least 2 years.
(3)- Complete P85 form from HMRC "Leaving the United Kingdom", available from HMRC website before you leave UK.
-- Once this form is completed am I still liable to pay UK tax? Is there a way in which I can legally avoid this?
(4)- Your salary could be paid tax free into your UK account altough you may wana get paid in UAE to avoid tax on interest from your savings. You can have UK bank account in Jersey which will have UK sort code and account number and set up direct debits to pay you bills, loans, mortgages in UK. Most high street banks such as Barclays, NatWest etc do them.
-- From this I understand it is best to have an off shore account to put any savings. the best place being the Isle of Mann since they seem to have depositors insurance. Is this correct? Having an off shore account I can pay of my monthly UK bills from that? Loans, Mortgage etc....???
(5) - Its cheaper to get paid in £ in UAE account and then transfer money to UK or Jearsey off shore account, as Transfers cost 50AED with most UAE banks (£7.5 approx) as compared to get paid in uk or offshore account and then transfer to UAE , usually £25-£30.
Should I request that my salary be converted to UK £'s instead of being paid in UAE Dh's? Do companies do this as a matter or practice for British expats?
(6) If you own a house in UK and renting it out via agent or directly then complete "Overseas Landlord Form" from HMRC to get rent Gross (before tax) and register for "Self Assessment" with HMRC and you will at the end of tax year receive SA forms. If the property is jointly owned then both of you will have to SA.
-- I will be renting out my house but the rent will not cover the entire mortgage. Do I still need to fill this form in?
(7) remember your Mortgage Interest you pay, agents fees, insurances and maintenance costs, Council Tax payable can be deducted from the tax able rent. Also if thats the only form of earning you have then you also have £5250 tax allowance (2007-2008) before you pay basic rate of tax @10%
Since I am possible going to be losing money on renting my house can I claim this money back from the taxman even though I am possibly not paying any UK tax?
Any further guidance and help is greatly appreaciated.
Having copied the list of items from the previous threads I would like to confirm my understanding.
(1)- To get real benefit of Tax free salary you have to work for atleast 1 Tax year. i.e. if from 6th of April to 5th of April of following year. but if you start lets say in Jan. 2009 then you have to work till 5th of April of 2010 to be classified as full tax year.
-- Does this mean I would have to pay UK tax from January 2009 to April 2009?
(2)- you must not spend more than 90 days on average over 4 years in UK
-- This I will not be doing since when I move I am expected to stay for at least 2 years.
(3)- Complete P85 form from HMRC "Leaving the United Kingdom", available from HMRC website before you leave UK.
-- Once this form is completed am I still liable to pay UK tax? Is there a way in which I can legally avoid this?
(4)- Your salary could be paid tax free into your UK account altough you may wana get paid in UAE to avoid tax on interest from your savings. You can have UK bank account in Jersey which will have UK sort code and account number and set up direct debits to pay you bills, loans, mortgages in UK. Most high street banks such as Barclays, NatWest etc do them.
-- From this I understand it is best to have an off shore account to put any savings. the best place being the Isle of Mann since they seem to have depositors insurance. Is this correct? Having an off shore account I can pay of my monthly UK bills from that? Loans, Mortgage etc....???
(5) - Its cheaper to get paid in £ in UAE account and then transfer money to UK or Jearsey off shore account, as Transfers cost 50AED with most UAE banks (£7.5 approx) as compared to get paid in uk or offshore account and then transfer to UAE , usually £25-£30.
Should I request that my salary be converted to UK £'s instead of being paid in UAE Dh's? Do companies do this as a matter or practice for British expats?
(6) If you own a house in UK and renting it out via agent or directly then complete "Overseas Landlord Form" from HMRC to get rent Gross (before tax) and register for "Self Assessment" with HMRC and you will at the end of tax year receive SA forms. If the property is jointly owned then both of you will have to SA.
-- I will be renting out my house but the rent will not cover the entire mortgage. Do I still need to fill this form in?
(7) remember your Mortgage Interest you pay, agents fees, insurances and maintenance costs, Council Tax payable can be deducted from the tax able rent. Also if thats the only form of earning you have then you also have £5250 tax allowance (2007-2008) before you pay basic rate of tax @10%
Since I am possible going to be losing money on renting my house can I claim this money back from the taxman even though I am possibly not paying any UK tax?
Any further guidance and help is greatly appreaciated.
Dec 1st 2008, 12:48 pm
#124
Just Joined
Joined: Dec 2008
Posts: 3
Re: UK Income Tax
Dear all,
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
I was asked to move to Dubai on 1st October 2008 for 3 years contract. My question is:
Do I need to pay income tax from the 1st of October 2008 until April 2009 when the 2008 UK financial year end?
Or according to lionheart no provided that I spent a whole UK tax year i Dubai, ie at least until April 2010?
Note: I will receive my first payment in Dubai at the end of October in AED in a Dubai bank account.
Cheers!
I am am in a similar situation also in that I would be expecting to start work in the UAE for a UK company. But the UK company in the Dubai is a separate running entity registered in Dubai. Hence I am working for a UAE company. Is this a right assumption?
In this case would I pay tax for the months up until April 2009? Or fill out the P85 and stop paying taxes altoghether?
My company is providing an option of either becoming a Permanant Transfer and getting paid the local rate for what I do or using the Hypo Tax and Cost of Living Allowance that includes housing, education benefits etc...
I am a bit confused as to what the differences are at this time but if the tax rate being paid in the UAE is 0% then this notion of no better or worse off is confusing. Since in the companies eyes I would be better off? How can I get around this?
Or how can I convince them to pay me my gross salary?
Any suggestions on what to consider or come up with a way of thinking forward?
Regards,
Waztt
Dec 1st 2008, 12:50 pm
#125
Just Joined
Joined: Nov 2008
Posts: 10
Re: UK Income Tax
hi i was asked to fill in form s109 instead of p85... about non-resident status... not sure what the difference is
Dec 1st 2008, 12:53 pm
#126
Just Joined
Joined: Dec 2008
Posts: 3
Re: UK Income Tax
One more question.....
If I don't pay UK tax for two years and have children with me outside of the UK for that time. Will they be considered foreign students when they return back for further studies?
I have heard somewhere that if your out of the country for a few years and are a British National your children are then considered foreign students.
If anyone has any insight on this please let me know.
If I don't pay UK tax for two years and have children with me outside of the UK for that time. Will they be considered foreign students when they return back for further studies?
I have heard somewhere that if your out of the country for a few years and are a British National your children are then considered foreign students.
If anyone has any insight on this please let me know.
