Brendanrc

Hi

My wife and I are planning to move back to the UK from Sydney for 12 months or so - we intend to return to Sydney - and are looking for advice. We have been living in Australia for 22 years. We have dual citizenship. We own a house in the UK (currently rented) that we will use as a base (intend to see a bit of Europe). We will retain our house in Sydney. Having just retired our income stream will be from our Superannuation pension in Oz.

We still have NI numbers. We both have current Australian driving licences and the old paper UK driving licences. Our questions include;

- Will we need to get new driving licences and what does that involve?
- Do we need to register to pay UK tax and are there any other tax implications we need to consider?
- Will there be any issues registering with a GP whilst we are in England - we intend to go back to our old medical practice?
- We are presuming that we will still be classed as being Australian residents as we have a house there and plan to return within two years. Is that correct?

Any advice would be most appreciated.

BritInParis

- No. Your paper licences remain valid providing your names and addresses remain the same and the licence hasn't reach its expiry date.
- Pass.
- Not as you are returning to reside in the UK.
- Not sure what you mean by this. If you are resident in the UK for 12 months then you'll be a UK resident for those 12 months and be liable for UK income tax, council tax, etc.. You should also register onto the electoral roll which is a legal requirement.

Brendanrc

Thanks BritInParis

Your answers have confirmed some of what we suspected and we hadn't considered the electoral roll so thanks for that.

Looks like we will need to get further advice on the tax treatment because even though we will we classed as residents for tax purposes there are complications such as domicile and income source to consider - for example, if we bring money to the UK for use over the 12 months from savings rather than income in the tax year does that still attract UK tax? Probably best to speak with HMRC when we arrive.

Thanks Again

BritInParis

If it's already your money, i.e. savings held in your Australian bank account, then you shouldn't attract any UK tax on it. If it's income from another source, i.e. pension payments, then the UK has a double taxation agreement with Australia that should prevent you from being liable to paid tax twice if you're being paid into a UK bank account. HMRC has more information on their website.

https://www.gov.uk/tax-foreign-income/overview

TopNik

Hi Brendanrc,

I am not sure if you are aware that the rules surrounding UK tax residence changed significantly with effect from the 2013/14 tax year which now involves the statutory residence test (SRT).

If classed as UK resident you would then be taxed on your worldwide income.

Your individual circumstances would need to be looked at in much more detail to firstly determine your residence status and in turn the impact that this may have on UK taxation.

Also, you mention that you own a house in the UK which is currently rented, depending on the amount of rental income being received and the length of time this spans you may have needed to have previously declared this rental income to HMRC which from the sound of your post if applicable has not been done.

Brendanrc

Thanks for your advice TopNik

From our reading of the new rules our plans will place us either as UK resident but not domiciled, or dual resident.

We have been paying tax to HMRC against our rental income via our estate agent and making relevant claims in our Australian tax return so hopefully we won't have any more to pay. The money we will be bringing over to live on is savings rather than income from the 2015 tax year - some of it from an inheritance from the UK which did not require a tax payment, so we are hoping that will not be subject to UK tax

TopNik

Hi Brendanrc,

Depending on your circumstances in any particular tax year you will be classed as either UK resident or UK non-resident for tax purposes not dual resident.

With regards to your rental income, when you are a Landlord based overseas by law your Lettings Agent has to automatically deduct basic rate tax from your rental income and pay it over to HMRC.

This does not however mean that the tax deducted from your rental income would have actually been payable at the end of that tax year.

As previously mentioned, depending on the amount of rental income being received and the length of time this spans it may also have been a requirement for you to submit annual tax returns to HMRC.

In most cases overseas Landlords are normally due a tax refund at the end of the tax year after taking into account allowances, reliefs and expenses that can be claimed for tax purposes against rental income. These are claimed by completing and submitting a self assessment tax return to HMRC at the end of the tax year showing the tax calculation performed and the end result of the amount of tax either payable or refundable.

There are however deadlines to claim tax refunds due from previous tax years if this is applicable to you and you have not done so already.

Brendanrc

Thanks again TopNik

We will clarify our situation with HMRC when we arrive. Much appreciated

TopNik

You are most welcome!

nun

If your tax residency status changes part way through the year you might be get "split year" tax treatment; so you'd be treated as UK resident for part of the year and non-resident for the rest of the year.

TopNik

That is not correct, you are either UK resident or UK non-resident for a tax year.

With effect from the 2013/14 tax year and as per HMRC one of the rules for split year treatment to apply is that you must be UK resident for that tax year under the Statutory Residence Test (SRT). You will not meet the split year criteria for a tax year for which you are UK non-resident.

slackbloke

Regarding tax, as you have a income source in the UK from property you should already be completing self assessment each year. You are still entitled to the personal allowance to help offset any tax liability.

nun

I think we might be talking at cross purposes here. You must meet the SRT to qualify for split year treatment......but you will be taxed as a non-resident for part of the year and as a resident for the rest of the year if you do qualify.

Is that correct?