wsm_nick

Hello, I'm a long time reader of good advice on here but first time poster !.

I'm looking for some advice on my UK tax return / self-assesment for 2008/09.

I moved to the US in August 2008 on an L1 visa, having worked in the UK all my life prior to this.

I worked in the UK from April to July 31st in the 2008/09 tax year, so I have UK earnings during that period (detailed on my P45) and from August 1st 2008 I was paid in the US under a new US contract.

I still have a house in the UK which is rented out via an agency. I know I need to declare my income on this.

At first thought I was thinking that I'd just have to detail my UK earnings and rental income, but now I'm not sure if I'm also supposed to declare my US earnings for the August 08 to April 09 period although I've already paid tax in the US on this.

I started trying to read the docs on the HMRC website and got totally confused whether I was even considered resident in the UK still.

My next step was to try phoning HMRC advice line, but I guessed most people on this forum were in this position at some point and thought I'd ask here first.

Any suggestions or advice would be greatly appreciated.

Thanks!,
Nick.

rew1000

My understanding is that if you're going to be out of the UK for a few years (in particular, for at least an entire tax year), HMRC will consider you to be "non-resident and not ordinarily resident" from the date you left. So from that point, employment income and bank interest income (but not, I believe, income from renting property) will not be subject to UK tax, and does not have to be declared.

Possible steps:

1. File form P85 with HMRC - should mean a tax refund as you can apply all of the 2008/2009 personal allowance to just 4 months of earnings.

2. File form R105 with your bank(s) to arrange for tax-free payment of interest.

3. Consider whether you wish to pay voluntary NI contributions while abroad (2 quid a week) - if so see http://www.hmrc.gov.uk/cnr/osc.htm

4. Register as a non-resident landlord http://www.hmrc.gov.uk/cnr/nr_landlords.htm

HMRC Residency section (http://www.hmrc.gov.uk/nonresidents/) have always been very helpful when I've had to call up (they even answer emails!)

I'm not in the position of having UK rental income, but I believe that you have to put it on both the UK and US tax form, then claim a "Foreign Tax Credit" on the US form to offset the UK tax already paid.

Peter Newton

Hi:

If you have not already filed a P85 you should file it now- this will trigger a refund and let HMRC know of your status and intentions.

Normally when you file a P85 upon leaving the UK, HMRC will send a tax return to your overseas address in April of the next year. If you did not file P85 you won't get the return, but based on your facts I believe you must file a UK tax return for 08/09. The return is due 31 Oct 09 if you want to file on paper, or 31 Jan 09 if you file online.

Based on your situation your employment earnings will only be taxed in the place they are earned.

Since you have UK rental income you will have to declare it on both your UK and US returns, and as noted above, you will get a foreign tax credit on your US return.

wsm_nick

Thanks for the advice. I filed P85 when I left the UK last year and did indead get a tax return form in April this year.

So if I'm reading right, I only need to declare my UK income on the form, i.e. my UK earnings from before leaving and rental income for the year ?.

Peter Newton

Correct- based on your facts you only need to declare on your UK tax return your UK employment income up to when you left, and your ongoing rental income.

Cape Blue

You should also have filed an NRL1 for the rental property

stephend-

This is also a handy page:

http://www.hmrc.gov.uk/cnr/

It's seems to have handy tips, FAQs, and news relating to residency issues.

mayhemuk

Also note that you can't file online from overseas. You have to do the paper form. I tried this year and the online options are not available.
The same January cut off date applies but you submit early if you want them to work it all out.

Peter Newton

Ahem- if you use a tax professional, you can file online from overseas.

mayhemuk

Eh? So pay someone to do it for you??? How's that fair.

Peter Newton

Hey- I don't make the rules!

buckers

Hi

Just a quick one ref the rental via an agency. We are just in the process of renting out our property via a local agent and are oving over to the US in the next 8 weeks.

Your agent should have given you an NRL1 form (i think it is) to complete and they should have sent this off, so that you are not liable for tax as a "non resident" of the UK now. If you havent done this may be worth speaking with either the Inland rev or your agent to get this form........could save you abit

Hope this helps

wsm_nick

Many thanks for all the advice on this.

I did file NRL1 when I left the UK, so I think I'm all set ... well, I thought I was. I didn't know about the lack of the online option ... and I'd only just managed to retrieve my lost password for the HMRC site as well !.

sangiano

You can file online from overseas without a tax professional.

You just need the right software that is accredited with HMRC.

I use ProTax form Forbes. http://www.tax.co.uk/

It has all the forms (including Property Rental & Foreign Residence) that I've ever needed.

You can download it and fill in the forms without paying, but payment allows online submission and printing without a legend all over it.

It costs £20 a year and the refund (if there is one) is usually in your account within a week of submission.

mayhemuk

OK. I stand corrected. I could not file online with HMRC from overseas.
With some other software I did not know about. But then why should I need other software?