michali

Just had a shock that my husband is no longer entitled to personal allowance! Is there a good forum where I can get some advice please on what we might have to pay for our profit for year ending 2014?

rebs

You could try the tax forum on moneysavingexpert... http://forums.moneysavingexpert.com/...splay.php?f=22 they might be able to help

michali

That looks helpful. Thanks!

JAJ

Really? Did you read that on the HMRC website? If so, please share the link.

Perhaps you are confused with the Government announcement that they are reviewing the personal allowance for non-residents, and may (probably will) withdraw it. But this will only affect future tax years, probably not starting until 2015/16.

michali

I called HMRC as I am completing our tax returns, the non resident section has changed a lot and the notes indicated that he cannot tick the box to get the oersonal allowance. It is because he is non EU, and not a resident in a country that has a tax treaty with UK. He used to be entitled to it but apparently it all changed for Commonwealth citizens in 2010.

If that is the case, JAJ, maybe it is good we are going back to the UK! We will have less income to tax anyway.

JAJ

Citizenship of a Commonwealth country is no longer a basis to claim a personal allowance, starting from April 6, 2010 (2010/11 tax year). However, there are other circumstances where a personal allowance may be claimed. See pages 52-53 of booklet RDR1.
http://www.hmrc.gov.uk/cnr/rdr1.pdf

This change (for Commonwealth country citizens) happened four years ago. Were you U.K. resident in the meantime? If you were non-resident since then, how was this handled on tax returns each year.

michali

I will have to contact our accountant who used to do our taxes. I have only just started doing them myself.

Pistolpete2

Just logged in the HMRC self assessment site and noticed that my 2012-2013 tax return has been zapped for an assessment which exactly equals the removal of my personal allowance for that tax year, presumably because HMRC are just in receipt of my form sa109 for non-residence. I guess that means that there are no underlying details that show me as a Uk citizen.

windsong

Why are they removing the personal allowance? Are they removing it for everyone?

Pistolpete2

They made a mistake, or didn't have a link to see that I'm a UK citizen . UK and EU citizens plus a few other nationalities still get the personal allowance even though others had it removed effective April 6th, 2010, as above.

windsong

That's what I thought. So sorry they made a mistake in your case. Hopefully, it can be easily rectified.

spouse of scouse

Off to ask Mr Google if Australian spouses are eligible for the personal tax allowance before being granted ILR.

...that bit of research only served to confirm that we'll need the assistance of a financial advisor and an accountant with good experience of the Australian and UK tax systems.

Michali, I hope this hasn't put too much of a hiccup in your plans.

Pistolpete2

Oh Boy, I've been spending significant time delving into residence and UK tax in recent days. I would guess that it would be hard to google but would say that being resident for UK tax purposes has no link to immigration status. It has more to do with having accommodation, family and work ties from the get-go and if you are tax resident you get the personal allowance. If you are in the UK for more than six months you are resident for tax purposes and get the personal allowance.

The Statutory Residence Test governs all of this now and is not as uncertain as Ordinary or Permanent Residence can sometimes be, even though trying to understand its finer details can hurt your head in the worst way - particularly split year treatment as in the year you arrive or you depart.

A reason that you wouldn't get the personal allowance would be if it were tax expedient for YOU to pay tax on the remittance basis - only what arises or gets remitted to the UK in order to live - in which case you forego the allowance - a high overseas earner problem.

spouse of scouse

Thanks Pistolpete, your research is paying off because you sound very knowledgeable

This stuff hurts my head, I hope the accountant we get talks in a language I can understand! Still have no idea how to structure our finances best and nearly all our capital assets will be in Oz, with the intention that we'll live on the income these produce. Unravelling the tax maze is a must. Nightmare stuff - like you I've tried so hard to get a good understanding of the ins and outs but it all gets tangled up.

Pistolpete2

IF you are heading to the UK and are not taking up a lease on a property or moving into your own pad right away there can be issues relating to the effective date at which you become resident in the UK for tax purposes. Most likely, if not working right away, this is the date when you do in fact move into a place you can call home. What is more, this is the date when your overseas part ends and your UK part starts when you apply for split year treatment of your income and this can be a BIG ISSUE if you are trying to dispose of otherwise taxable assets BEFORE arrival.

I would hazard a guess that this is harder when you are not moving between the UK and a country with which the UK has a double taxation treaty or vice versa.

The question is WHAT TRIGGERS ARE THERE to cause you to become tax resident in terms of UK Ties - per the Statutory Residence Test (SRT) and the guidelines in:

http://www.hmrc.gov.uk/international/rdr3.pdf

are tough going, particularly family ties and how they work within your own family group.

I will be seeking advice in this area from a tax specialist who can do the form filling.

Just went back through the forms I recently completed regarding my residence status and I quite clearly and correctly showed my entitlement to a personal allowance - can't think what HMRC were thinking/doing .