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1 year contract in Vietnam - Split year treatment

1 year contract in Vietnam - Split year treatment

Old Jun 20th 2022, 3:26 pm
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Default 1 year contract in Vietnam - Split year treatment

Hi all, I have a tax query, basically I have been offered an expat contract in the Far-East (Vietnam) for a year, so potentially from this August to July 2023 (right in the middle of the tax year, very unfortunate).
I have been looking at some old posts about split year treatment but there are quite old and not very clear.

Since I will be leaving the UK to work full time overseas and I will be less than 183 days in the UK my understanding was that I could get away as Non-Resident status and dot not pay taxes on my worldwide income? Am I right on this? I took the info from the bellow HMRC statement:

Begin full time work outside the UK
If you work overseas for 35+ hours per week, spend fewer than 30 days working full time (i.e. more than three hours per day) in the UK and spend fewer than 91 days in the UK, you would be considered a non-resident based on the sufficient hours overseas test.


Or perhaps the below HMRC statement could work for myself? (I do not currently own any house, just renting a room).

You cease to have a home in the UK
If you move abroad during the tax year, no longer have a home in the UK and subsequently spend fewer that 16 days in the UK, split year treatment may apply to you. However, this is on the provision that you are either a tax resident of another country within six months or have your only home by the end of six months


I will have the same issue on my return to the UK correct? Unless I come back on April 2024 which is not very realistic.

Has anybody experience a similar situation or could help me?

Many thanks!
Ethan
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Old Jun 24th 2022, 4:04 pm
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Default Re: 1 year contract in Vietnam - Split year treatment

Originally Posted by ethan38 View Post
Hi all, I have a tax query, basically I have been offered an expat contract in the Far-East (Vietnam) for a year, so potentially from this August to July 2023 (right in the middle of the tax year, very unfortunate).
I have been looking at some old posts about split year treatment but there are quite old and not very clear.

Since I will be leaving the UK to work full time overseas and I will be less than 183 days in the UK my understanding was that I could get away as Non-Resident status and dot not pay taxes on my worldwide income? Am I right on this? I took the info from the bellow HMRC statement:

Begin full time work outside the UK
If you work overseas for 35+ hours per week, spend fewer than 30 days working full time (i.e. more than three hours per day) in the UK and spend fewer than 91 days in the UK, you would be considered a non-resident based on the sufficient hours overseas test.


Or perhaps the below HMRC statement could work for myself? (I do not currently own any house, just renting a room).

You cease to have a home in the UK
If you move abroad during the tax year, no longer have a home in the UK and subsequently spend fewer that 16 days in the UK, split year treatment may apply to you. However, this is on the provision that you are either a tax resident of another country within six months or have your only home by the end of six months


I will have the same issue on my return to the UK correct? Unless I come back on April 2024 which is not very realistic.

Has anybody experience a similar situation or could help me?

Many thanks!
Ethan
The good news is that the UK has a double taxation treaty with Vietnam so you will not be taxed twice. However, taxation when working overseas can be complicated and it is no longer just a case of being out of the country for 183 days per year. I worked overseas from the UK and the best option is to find yourself a good tax accountant who understands your situation. My experience is that they will often save you more than what you pay them and you will have piece of mind without HMRC breathing down your neck. Good luck.

Vietnam: tax treaties - GOV.UK (www.gov.uk)
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