UK tax - Moving to Riyadh but not for a complete UK tax yr
#1
UK tax - Moving to Riyadh but not for a complete UK tax yr
Hello,
If I move to Riyadh on an 18 month contract in June will the salary be subject to UK income tax? The issue is that I won't be out of the country for 1 complete tax year!
What if I go out in June but the contract is for 24 months? I guess the 2011/12 tax year will be ok but what about the 9 months in 2010/11 and the 3 months in the 2012/13 tax year! Will this be tax free?
I have just read this on the HMRC website:
"When are you non-resident for UK Income Tax?
You'll be treated as non-resident from the day after you leave the UK if you can show:
you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years"
Please help as I've just been offered a job there and I'm a little anxious at the moment.
Thanks
If I move to Riyadh on an 18 month contract in June will the salary be subject to UK income tax? The issue is that I won't be out of the country for 1 complete tax year!
What if I go out in June but the contract is for 24 months? I guess the 2011/12 tax year will be ok but what about the 9 months in 2010/11 and the 3 months in the 2012/13 tax year! Will this be tax free?
I have just read this on the HMRC website:
"When are you non-resident for UK Income Tax?
You'll be treated as non-resident from the day after you leave the UK if you can show:
you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years"
Please help as I've just been offered a job there and I'm a little anxious at the moment.
Thanks
#2
Banned
Joined: May 2008
Location: Lagrange 2
Posts: 1,507
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
At the moment you will be taxed on all of your overseas earnings if you return to live in the UK after the 18 month contract in Nov 2011.
If you have a 24 month contract and thus return in June 2012 provided youv'e been here less than 90 odd days a year (forget about this averaging thing) you will suffer no tax at all.
If your family remains in the UK and you make trips there then you will be taxed because you will never have left.
If your contract ends in 18 months and you can't get work then stay outside Europe until April6 2012. You will not be taxed.
You should in either event fill in the R(?) or P 85 form and send it to the tax people (fill in both actually - you'll see what I mean) and this will sort out your tax. It will cancel your NHS entitlement but you lose that when you become non res. Fill in the R/P 86 when you return.
If you are subject to tax then you will have to declare your earnings when you return and you should in either event (I think must) bring your money on shore - ie empty your foreign bank acts befotr you return.
Keep your UK bank ac and cc open and use them from time to time. Register and use internet banking. Get an offshore ac when you are abroad if you want to keep your monety out of the Arab Banking system - but in honesty I found them to be better than the UK banking system. I recommend Brad Bingley International. Mail forwarding only lasts for two one year periods so be careful.
Good luck.
If you have a 24 month contract and thus return in June 2012 provided youv'e been here less than 90 odd days a year (forget about this averaging thing) you will suffer no tax at all.
If your family remains in the UK and you make trips there then you will be taxed because you will never have left.
If your contract ends in 18 months and you can't get work then stay outside Europe until April6 2012. You will not be taxed.
You should in either event fill in the R(?) or P 85 form and send it to the tax people (fill in both actually - you'll see what I mean) and this will sort out your tax. It will cancel your NHS entitlement but you lose that when you become non res. Fill in the R/P 86 when you return.
If you are subject to tax then you will have to declare your earnings when you return and you should in either event (I think must) bring your money on shore - ie empty your foreign bank acts befotr you return.
Keep your UK bank ac and cc open and use them from time to time. Register and use internet banking. Get an offshore ac when you are abroad if you want to keep your monety out of the Arab Banking system - but in honesty I found them to be better than the UK banking system. I recommend Brad Bingley International. Mail forwarding only lasts for two one year periods so be careful.
Good luck.
#3
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
If you have a 24 month contract and thus return in June 2012 provided youv'e been here less than 90 odd days a year (forget about this averaging thing) you will suffer no tax at all.
If your family remains in the UK and you make trips there then you will be taxed because you will never have left.
.
So if I don't return to the UK until June 2012 and I visit the UK, say, 5 times a year, a week at a time, will I be ok?
#4
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
So much incorrect nonsense is posted about tax, that I really don't know why I bother tryinng to correct it. I don't try and give advise about construction, oil, or designing underwear, so why do people persist in giving people their guesses as to the facts on this matter?
Geo79 - if you want proper advice, please PM me.
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Geo79 - if you want proper advice, please PM me.
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#5
Banned
Joined: May 2008
Location: Lagrange 2
Posts: 1,507
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
I respect Meows professional qualifications and her experience as an ex pat, but her personal attacks and rudeness are actually annoying and unhelpful because they are unspecific - but please do pm her; she is a professional and independent financial advisor.
I'm happy to continue the discussion because things have changed in the UK and the Revenue has changed its view - and is able to after a formal change in the rules on residency - and I have experienced this since returning.
In answer to your question - that frequency is safe for that period to avoid tax.
It is not going to be safe (and look at my choice of words) if you keep an empty house there or your family is there.
I'm happy to continue the discussion because things have changed in the UK and the Revenue has changed its view - and is able to after a formal change in the rules on residency - and I have experienced this since returning.
In answer to your question - that frequency is safe for that period to avoid tax.
It is not going to be safe (and look at my choice of words) if you keep an empty house there or your family is there.
#6
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
Hello Bijilo
Thank you for your reply. I appreciate your advice and I think I know where you're coming from.
I may contact the professional financial advisor but I don't know why she has to make reference to the sex stuff, I only want financial advice!
I suppose (correct me if I am wrong) I just need to take a view on whether I am likely to last in a 2 year contract!?
I have had a house in the UK for 2 years but I have never lived in it, it has always been let out and continues to be. Is this likely to affect things?
Cheers
Thank you for your reply. I appreciate your advice and I think I know where you're coming from.
I may contact the professional financial advisor but I don't know why she has to make reference to the sex stuff, I only want financial advice!
I suppose (correct me if I am wrong) I just need to take a view on whether I am likely to last in a 2 year contract!?
I have had a house in the UK for 2 years but I have never lived in it, it has always been let out and continues to be. Is this likely to affect things?
Cheers
#7
Banned
Joined: May 2008
Location: Lagrange 2
Posts: 1,507
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
Please speak to her and the references she made to underwear relate to an amusing exchange that ocurred in the recent past and don't reflect badly on her at all.
She is not allowed to advertise on this site - it is against the rules and probably against her personal ethos too - so it has to be your approach.
The house situation is good - register soon as a non-resident landlord - it takes about a month and it means your agent does not have to deduct 20% (?) as a witholding tax on your gross rent.
The 24 month contract does set you up as non res for tax purposes and frankly I'm surprised that there were not changes announced in the budget. Changes in the revenue rules / principles for residency in the recent HMRC6 almost invite the government to go further and lets face it the public have no sympathy for lazy rich non- taxpayers! Usually changes made are not applied retrospectively meaning that if you are ok now then you'll be ok then.
Good luck with your job.
She is not allowed to advertise on this site - it is against the rules and probably against her personal ethos too - so it has to be your approach.
The house situation is good - register soon as a non-resident landlord - it takes about a month and it means your agent does not have to deduct 20% (?) as a witholding tax on your gross rent.
The 24 month contract does set you up as non res for tax purposes and frankly I'm surprised that there were not changes announced in the budget. Changes in the revenue rules / principles for residency in the recent HMRC6 almost invite the government to go further and lets face it the public have no sympathy for lazy rich non- taxpayers! Usually changes made are not applied retrospectively meaning that if you are ok now then you'll be ok then.
Good luck with your job.
#8
BE Enthusiast
Joined: Jan 2010
Posts: 605
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
http://www.hmrc.gov.uk/cnr/hmrc6.pdf -HMRC20 section 8.5
#9
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
Thanks - I think that sums it up as said before, If I have a 24 month contract and I last the distance I will be fine, if not I'm ....
"8.5 - 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 will be absent from the UK for at least a whole tax year.
If you do not meet all of these conditions, you will remain resident and
ordinarily resident in the UK unless paragraph 8.2 applies to you.
If your employment comes to an end and you do not return to the UK it will
be necessary to consider if you continue to be not resident and not
ordinarily resident in the UK."
2.4 I guess is not relevant to me as it is regarding "Residence" rather than "Ordinary residence"? I got my hopes up for a moment when reading this.....
"2.4 Residence – Tax treatment for years of arrival and departure
from the UK
Strictly, you are taxed as a UK resident for the whole of any tax year when
you are resident here for any part of it. But, if you leave or come to the UK
part way through a tax year, the year may, by concession (Extra Statutory
Concession A11) be split. This means that the UK tax you should pay
because you are resident here is calculated on the basis of the period you are
living here rather than for the whole of that tax year. This has the same
effect as splitting the tax year into resident and not resident periods.
This split year treatment will apply to individuals who:
• come to the UK to take up permanent residence or to stay for at least two
years, or
• leave the UK to become permanently resident abroad or, subject to
certain conditions, leave the UK for full-time service under a contract
of employment."But like I say I don't think this is relevant! Can someone confirm?
Thanks for all your help guys....much appreciated.
"8.5 - 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 will be absent from the UK for at least a whole tax year.
If you do not meet all of these conditions, you will remain resident and
ordinarily resident in the UK unless paragraph 8.2 applies to you.
If your employment comes to an end and you do not return to the UK it will
be necessary to consider if you continue to be not resident and not
ordinarily resident in the UK."
2.4 I guess is not relevant to me as it is regarding "Residence" rather than "Ordinary residence"? I got my hopes up for a moment when reading this.....
"2.4 Residence – Tax treatment for years of arrival and departure
from the UK
Strictly, you are taxed as a UK resident for the whole of any tax year when
you are resident here for any part of it. But, if you leave or come to the UK
part way through a tax year, the year may, by concession (Extra Statutory
Concession A11) be split. This means that the UK tax you should pay
because you are resident here is calculated on the basis of the period you are
living here rather than for the whole of that tax year. This has the same
effect as splitting the tax year into resident and not resident periods.
This split year treatment will apply to individuals who:
• come to the UK to take up permanent residence or to stay for at least two
years, or
• leave the UK to become permanently resident abroad or, subject to
certain conditions, leave the UK for full-time service under a contract
of employment."But like I say I don't think this is relevant! Can someone confirm?
Thanks for all your help guys....much appreciated.
#10
BE Enthusiast
Joined: Jan 2010
Posts: 605
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
I am not an expert but I have been doing it for 35 years and so far I have not paid any tax. If you have a contract that takes in a full tax year then you are tax free from the day you leave to the day you return, providing you don't go back for more than 90 days per year. the Inland Revenue has made the guidance less and less clear over the 35 years, but so far, everyone I have worked with, who has complied with the above, has paid no tax.
#11
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
I am not an expert but I have been doing it for 35 years and so far I have not paid any tax. If you have a contract that takes in a full tax year then you are tax free from the day you leave to the day you return, providing you don't go back for more than 90 days per year. the Inland Revenue has made the guidance less and less clear over the 35 years, but so far, everyone I have worked with, who has complied with the above, has paid no tax.
#12
Forum Regular
Joined: Feb 2004
Posts: 182
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
"If you have a 24 month contract and thus return in June 2012 provided youv'e been here less than 90 odd days a year (forget about this averaging thing) you will suffer no tax at all."
What does this avaraging (which should be forgotten) mean? I meet lot of people who talk only about the full tax year being both a) employed and b) out of the country.
But, this averaging remains an obscure issue. I read about one rich man who was convicted to pay huge amount just because of this averaging condition.
If anybody knows the answer, sharing it would be highly appreciated.
What does this avaraging (which should be forgotten) mean? I meet lot of people who talk only about the full tax year being both a) employed and b) out of the country.
But, this averaging remains an obscure issue. I read about one rich man who was convicted to pay huge amount just because of this averaging condition.
If anybody knows the answer, sharing it would be highly appreciated.
#13
BE Enthusiast
Joined: Dec 2007
Location: Doha
Posts: 535
Re: UK tax - Moving to Riyadh but not for a complete UK tax yr
"If you have a 24 month contract and thus return in June 2012 provided youv'e been here less than 90 odd days a year (forget about this averaging thing) you will suffer no tax at all."
What does this avaraging (which should be forgotten) mean? I meet lot of people who talk only about the full tax year being both a) employed and b) out of the country.
But, this averaging remains an obscure issue. I read about one rich man who was convicted to pay huge amount just because of this averaging condition.
If anybody knows the answer, sharing it would be highly appreciated.
What does this avaraging (which should be forgotten) mean? I meet lot of people who talk only about the full tax year being both a) employed and b) out of the country.
But, this averaging remains an obscure issue. I read about one rich man who was convicted to pay huge amount just because of this averaging condition.
If anybody knows the answer, sharing it would be highly appreciated.
Basically, all else being satisfied, you can be considered non-resident if you are in the UK for fewer than 183 days in any one tax year. However, this must average at less than 91 days over any 4 tax years, and so, to be safe, most people aim for less than 91 days / year. If you have a 'normal' leave allowance, it should not be an issue.
Previously you worked out your days in the UK excluding days of arrival and departure. This has now been changed, and you count days in the country at mid-night.
The above constitutes a broad overview, however, each individuals circumstance is different.