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-   -   ...when/how you stop being UK TAX RESIDENCE? (https://britishexpats.com/forum/middle-east-60/when-how-you-stop-being-uk-tax-residence-908722/)

super1 Feb 2nd 2018 7:45 pm

...when/how you stop being UK TAX RESIDENCE?
 
...when/how you stop being UK TAX RESIDENCE?

this subject is very complicated, so I am trying to understand it


I am UK tax payer = UK tax residence, then

a) how they count 183 days towards tax resident? Tax years are different in some countries 1 Jan to 31 Dec, in the Uk 6 April to 5 April, to be a tax resident of the country you need to be in the country 183 days in their tax year or in your life?

b) where do I report that I am mvoing abroad to not be UK tax resident? Whats the procedure and documents required?

c) If you work outisde UK and not getting back to UK for more then 90 days, then you dodnt have to do tax assessment? What if you have UK interests from bank, then you have to do selft assesment?

thanks

Sabi Star Feb 3rd 2018 9:02 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 
You should fill in a HMRC form P85 - informing you are moving abroad. Then regarding the number of days you spend in UK and your interests there - the criteria varies. Look on the sites of the larger UK accountants like PWC to see charts about this matter.

Johnnyboy11 Feb 3rd 2018 11:48 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 
Assuming you are UK domiciled (i.e. your father had full British citizenship), and you are currently UK tax resident, then the fastest way to be confirmed UK non-resident for UK income tax and NI purposes is to pass the HMRC 'Automatic Overseas Test'. This involves leaving the UK to work full-time overseas for a full tax year and limiting your visits to or working days back to the UK, so 6th April 2019 at the earliest. There's a useful flowchart here.

There is an other route to UK non-residency, but you need to demonstrate that you have left the UK permanently, which will take 3-years or more and will depend upon the connecting factors detailed in the above link.

sicklyman Feb 5th 2018 9:18 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by super1 (Post 12433445)
you dodnt have to do tax assessment? What if you have UK interests from bank, then you have to do selft assesment?

you have to report any income from UK sources to HMRC. How you do that depends on what kind of income it is and how much it is. For example, if it's income from a single property and does not take you over your personal allowance, a letter to HMRC reporting this can be seen as sufficient. However, you might be advised to fill in a Self-Assessment return each year. HMRC can give out conflicting and sometimes wrong advice on what you should do so, if you find it so confusing, and you have any significant UK income I would employ an accountant that specialises in non-residency.

FriendlyExpat Feb 5th 2018 4:23 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by super1 (Post 12433445)
...when/how you stop being UK TAX RESIDENCE?

this subject is very complicated, so I am trying to understand it


I am UK tax payer = UK tax residence, then

a) how they count 183 days towards tax resident? Tax years are different in some countries 1 Jan to 31 Dec, in the Uk 6 April to 5 April, to be a tax resident of the country you need to be in the country 183 days in their tax year or in your life?

b) where do I report that I am mvoing abroad to not be UK tax resident? Whats the procedure and documents required?

c) If you work outisde UK and not getting back to UK for more then 90 days, then you dodnt have to do tax assessment? What if you have UK interests from bank, then you have to do selft assesment?

thanks

You may still have to do tax returns even if you have no UK income but you can ask HMRC nicely (on the phone) to be exempted and they are usually quite helpful.

As for the underlying position, the rules are complex and tricky and there is no "simple" summary that will also be helpful.

If you want to check the position by yourself, start by reading the guidance paper RDR3 (https://www.gov.uk/government/upload...nal_078500.pdf). Note that this guidance is not definitive and you also have to consider the underlying law and the relevant court cases.

If you don't fully understand RDR3, get professional advice from someone who does. This is helpful in itself and also may offer some protection if you make a mistake.

It's sometimes necessary to keep extremely detailed records to prove non-residence status, and if you can't produce these on demand at short notice when HMRC asks (which it sometimes does) then you could be deemed fully liable for UK tax on your worldwide earnings, so it's really not something to take lightly.

Bahtatboy Feb 5th 2018 5:11 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by FriendlyExpat (Post 12435369)
You may still have to do tax returns even if you have no UK income but you can ask HMRC nicely (on the phone) to be exempted and they are usually quite helpful.

...

It's sometimes necessary to keep extremely detailed records to prove non-residence status, and if you can't produce these on demand at short notice when HMRC asks (which it sometimes does) then you could be deemed fully liable for UK tax on your worldwide earnings, so it's really not something to take lightly.

After about 4 years of being non-resident the reminders from HMRC to do self assessments stopped coming. I can't remember if they actually wrote and said I didn't need to do them any more, but there was no follow-up action.

I keep records of all my trips to UK (now on the "nights spent in UK" basis), with e-records of flights. Just in case.

littlejimmy Feb 7th 2018 6:35 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 
This is all a bit worrying (and I like to worry). I could be liable to pay tax on my earnings here because I may be deemed to be supporting my family in the UK.

:confused:

co durham boy Feb 7th 2018 9:02 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by littlejimmy (Post 12436601)
This is all a bit worrying (and I like to worry). I could be liable to pay tax on my earnings here because I may be deemed to be supporting my family in the UK.

:confused:

Ssssssshhhhhh don't tell them

sicklyman Feb 7th 2018 9:31 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by co durham boy (Post 12436668)
Ssssssshhhhhh don't tell them

absolutely...


... but make sure your family don't avail themselves of any services in the UK that are funded by the taxpayer.

co durham boy Feb 7th 2018 10:50 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by sicklyman (Post 12436683)
absolutely...


... but make sure your family don't avail themselves of any services in the UK that are funded by the taxpayer.

I still have the same dentist and doctor that i did 30 years ago ;)

FriendlyExpat Feb 7th 2018 6:36 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by Bahtatboy (Post 12435412)
After about 4 years of being non-resident the reminders from HMRC to do self assessments stopped coming. I can't remember if they actually wrote and said I didn't need to do them any more, but there was no follow-up action.

I keep records of all my trips to UK (now on the "nights spent in UK" basis), with e-records of flights. Just in case.

Be careful as you can get fines if you're supposed to do a tax return but don't (e.g. if you have any UK income such as interest). HMRC don't have to remind you and they might find out eventually.

FriendlyExpat Feb 7th 2018 6:55 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by littlejimmy (Post 12436601)
This is all a bit worrying (and I like to worry). I could be liable to pay tax on my earnings here because I may be deemed to be supporting my family in the UK.

:confused:

Will you spend less than 16 days a year in the UK in the current tax year (if you were resident in the UK in any of the three previous tax years)?

Or (if you weren't UK resident in any of the previous three tax years) will you spend less than 46 days in the UK in the current tax year?

If the answer is "yes" then you can stop worrying :)

Scamp Feb 8th 2018 4:39 am

Re: ...when/how you stop being UK TAX RESIDENCE?
 
Internet forum tax advice is the best. :thumbup:

FriendlyExpat Feb 9th 2018 8:04 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 

Originally Posted by Scamp (Post 12437449)
Internet forum tax advice is the best. :thumbup:

Nothing can go wrong :rofl:

Gobobo Feb 11th 2018 4:49 pm

Re: ...when/how you stop being UK TAX RESIDENCE?
 
This subject is of interest to me, too. I've been in and out - mostly out - of the UK for the last twelve years. I've had no property or business dealings back there since leaving, just some accounts; banking, saving, share dealing. I haven't worked permanently in the UK since 2006, but have temporarily in the summer - 4 weeks or 20 days, usually. They're the positives.

Now the negatives. In 2008-9 between jobs, I spent more than a few months back home. I didn't work or claim benefits, but I used the NHS for an operation. Since then I've only been in the UK for a couple of months, at most, per year. I don't have records of flights made, or a very clear memory of the dates. Anyway, flight records of you leaving/entering the UK don't actually prove you were in/out of the country if you don't give all of the flights you took.

So far, I had one letter from the revenue people when I signed on in 2007, and paid some tax for 2006/7 (I think) on my overseas earnings. I didn't repeat that mistake. Since then I've had no word from the nice revenue people, and when I've worked temporarily in the UK I've received the salary free of tax, as I'm under the threshold. Keeping schtum seems to have worked, so far, and I may never return to the UK on a permanent basis, so I think I'll just continue keeping my head far below the parapets.


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