Query on UK income tax

[Glasceb]

Hi

Sorry if this has been asked before.

I'm coming out to Dubai in the next couple of months to live and work and intend opening an onshore account for every day expenses plus an offshore account for savings.

Question is; if I return to live permanently in the UK in say a couple of years, will I be liable for tax on any money that I transfer into the UK from the offshore account?

Any help would be appreciated. Thanks

[Elphaba]

Yes it has been asked before and I have answered it each time!

If you only plan to be UK non-resident for two years you will have UK taxliabilities for the remainder of this tax year (2008/09) and for the year in which you return (2010/11). You will also have to pay tax on monies that you take into the UK, subject to your personal allowances and Capital Gains Tax (CGT) allowances.

You do not become automatically non-resident for tax purposes just be going abroad. You need be so for 4 years for partial years to be exempt from UK tax. You need to be overseas for even longer to be exempt from CGT.

Before leaving the UK you should complete HMRC form P85 and sent it to your tax office to register to be non-resident for tax purposes.


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[Maz25]

Originally Posted by Elphaba

Yes it has been asked before and I have answered it each time!

If you only plan to be UK non-resident for two years you will have UK taxliabilities for the remainder of this tax year (2008/09) and for the year in which you return (2010/11). You will also have to pay tax on monies that you take into the UK, subject to your personal allowances and Capital Gains Tax (CGT) allowances.

You do not become automatically non-resident for tax purposes just be going abroad. You need be so for 4 years for partial years to be exempt from UK tax. You need to be overseas for even longer to be exempt from CGT.

Before leaving the UK you should complete HMRC form P85 and sent it to your tax office to register to be non-resident for tax purposes.


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Quite right. As soon as your money hits a UK bank account, you will be liable for taxes on all of it. You can, on the other hand, keep it under the matress and pay no taxes!

As Elphaba has right said, you need to fill out the P85 and based on the information you provide, the taxman will decide how much taxes you are owed. As you are leaving part way through the tax year, at the most, you will only get back taxes that you have paid on your annual allowance. The rest, the taxman will keep! You only get most of it back if you are leaving the UK permanently and do not intend to come back for at least 4 years or more. In that case, you will be asked to provide proof that you have indeed left and do not intend to come back!

[AshbyA]

This has worried me a little bit. I might be getting the wrong end of the stick as the whole tax thing confuses me but - I spoke to someone on the phone and read the link below and both led me to believe that I would not pay any tax as long as I was out of the country for more than 1 tax year and do not come back that often. Is this not the case?

ok have not made enough posts to put the website in but it is on the HMRC website under moving abroad

[Elphaba]

If you are resident outside the UK for a full tax year and so not return to the UK for more than 89 days you will be exempt from UK income tax in that year. Partial years are a different matter and it then depends on how long you are overseas in total.

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[fjcruiser]

the form you need is P85

[fjcruiser]

sorry i cannot post URL yet but you should type:
www dot hmrc dot gov dot uk fwd slash cnr fwd slash p85 dot pdf

good luck

[Elphaba]

Here is the link - which has been posted before.

http://www.hmrc.gov.uk/cnr/p85.pdf


My comments regarding liabilities stand - this form won't change that!



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[JunFan]

Here's an extract of an answer to the same question I posed to my accountant, who has never let me down with financial advice before, so I believe him...
"When you arrive back in the UK and revert back to being resident again, the monies you have earned overseas is not taxed. The IR don’t work retrospectively, but of course any interest that you earn on those monies/savings etc once you’re back resident in the UK would need to be accountable on your tax return in the year concerned."

[Elphaba]

Originally Posted by JunFan

Here's an extract of an answer to the same question I posed to my accountant, who has never let me down with financial advice before, so I believe him...
"When you arrive back in the UK and revert back to being resident again, the monies you have earned overseas is not taxed. The IR don’t work retrospectively, but of course any interest that you earn on those monies/savings etc once you’re back resident in the UK would need to be accountable on your tax return in the year concerned."

Sorry, but this is not strictly correct. It depends on how long a person is outside the UK, as a return part way thorugh a tax year if you have not been non-resident for an extended period will lead to a full UK tax liability in that year.

And HMRC (no longer called IR!) does work retrospectively.

In my experience (professionally) not all accountants are familar with rules for non-residents as many do not deal with this area on a regular basis.

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