Returning to uk - tax issues

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Returning to uk - tax issues


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Old 17th April 2017, 12:14 PM
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Default Returning to uk - tax issues

Dear all,
I am from the UK and moved to Dubai in April 2012 (several days after the new tax year began). I plan to return later to the UK later this month, but at the time of leaving I did not notify HMRC as I wasn't sure how long Id be abroad for. Once it became clear that I would be staying permanently once I had completed my probation period, I sent a letter to HMRC to notify them that I had moved to the UAE. I have heard nothing back since and have remitted money to my UK bank account and pension periodically. I also have an offshore bank account.
I have not spent 90 days in the UK in any of the years since I left.

I know this question will crop up a lot, but can I safely transfer funds from my UAE bank account and offshore account back to the UK without being taxed?
Would it be a good idea to keep my UAE bank account open for a while, too?
Any advice appreciated

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Old 18th April 2017, 04:40 AM
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As long as you can show you have been out of the UK for at least 1 full tax year, you should be fine to send funds back to the UK without being taxed.

You're supposed to shut down your UAE account before leaving the country, although it's not always practical to do that. The banks will generally make it difficult for you to do so remotely. Your bank will freeze your account if there is no activity for 6/12 months.

There's not much risk leaving it open with a small balance unless you signed up for an account that has charges if you stop paying your salary into it or maintain a balance below the minimum amount.

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Old 18th April 2017, 05:49 AM
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I looked into this recently and bearing in mind I'm not an account/tax advisor, this is my understanding:

remittances from abroad during the tax years you spent here are not taxed provided you've been filing your tax returns. Any local income (rental, interest etc.) will be taxed at the basic rate.

When you return, any money you transfer across in the tax year of your return, could be subject to tax. If your transfer is below the threshold on your tax code for the year, you'll pay 0 tax, if above you'd pay tax as normal.

You can apply for a split year treatment where you basically claim that the part of the year you transferred cash over, you were resident abroad (and this cash is therefore not subject to tax) with the second part of the year where you get a job at home, being taxed as normal.

I would highly recommend getting a proper tax advisor involved as it is likely that if you don't apply the split treatment correctly, you could end up with a 40% rate (depending on how much you transfer within the year).

again, i'm not a professional in this field and this is only my understanding. I don't claim it to be correct.

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Old 18th April 2017, 01:29 PM
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Quote:
Originally Posted by Chaosphere View Post
I looked into this recently and bearing in mind I'm not an account/tax advisor, this is my understanding:

remittances from abroad during the tax years you spent here are not taxed provided you've been filing your tax returns. Any local income (rental, interest etc.) will be taxed at the basic rate.

When you return, any money you transfer across in the tax year of your return, could be subject to tax. If your transfer is below the threshold on your tax code for the year, you'll pay 0 tax, if above you'd pay tax as normal.

You can apply for a split year treatment where you basically claim that the part of the year you transferred cash over, you were resident abroad (and this cash is therefore not subject to tax) with the second part of the year where you get a job at home, being taxed as normal.

I would highly recommend getting a proper tax advisor involved as it is likely that if you don't apply the split treatment correctly, you could end up with a 40% rate (depending on how much you transfer within the year).

again, i'm not a professional in this field and this is only my understanding. I don't claim it to be correct.


I'm not a tax advisor either

However I did research this before I took my job here.

In my scenario where I can show I have a property to live here and I'm employed and paid locally, I'm not liable to any UK tax providing I don't return for 90 days or more to the UK during any given tax year.

The way I understand the bit about returning is slightly different in that if you are simply transferring money that has already been paid to you/ earnt by you during one of your full tax years outside the UK then its not subject to UK tax, if its been paid during a split year or if you receive any further income once you are back then it may be. In other words if you have saved for X years while in Dubai and transfer it all back in one hit most of it wont be taxable (assuming you can provide payslips/accounts showing when its been 'earnt'.

Well worth spending a little on a tax advisor

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Old 22nd April 2017, 10:58 AM
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Default Transferring money

Thanks all for your replies.
I currently bank with ADCB...but can anyone suggest a cheaper/the cheapest method of transferring money back to the UK currently and should this be in GBP or AED?
I would be transferring quite a large amount...over 100,000 dirhams.
Thanks

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Old 22nd April 2017, 06:06 PM
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1) Even if you did not notify HMRC, you are not considered a tax resident.
2) Just make sure you transfer the funds into UK before you enter UK as your status tax residence changes. There is no need to declare it in the tax year. Split tax treatment is not meant for this.
3) There is no requirement to close your bank account. You can keep it forever if you want after you leave. Banks tend put down charges when the balance is below a certain amt. UAE central bank has regulations on treating inactive accounts and the charges to apply for balances below the threshold. Even if the charges wipe out all remaining balances, banks will simply close and no action is taken for such an event. No blacklisting will occur. You are free to come in and out of UAE.
4) Bad debts, such as unpaid bills is a whole different thing.

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Old 22nd April 2017, 06:51 PM
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Quote:
Originally Posted by Chaosphere View Post
remittances from abroad during the tax years you spent here are not taxed provided you've been filing your tax returns.
Untrue - your 'Ties' to the UK are assessed individually and a decision is made as to whether you are non-resident for tax purposes and whether you pay taxes or not. You don't decide you are not tax resident - thats determination which HMRC make and its not as simple as others make out.

For example a tie might be a family home, it might be a situation here you have investments in the Uk and the family members who reside in the UK. Too many 'ties' and you end up paying taxes even if you stay out 365 days every year. The old days of 'stay out for the year and you will be okay' are well gone and completing the tax return doesnt mean the taxman will not judge you to owe at some time in the next seven years.

Get some professional tax advice from Nikkisizer on here and ignore the 'personal experience' experts here.

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Old 22nd April 2017, 07:06 PM
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Quote:
Originally Posted by twowheelsgood View Post
Quote:
Originally Posted by Chaosphere View Post
remittances from abroad during the tax years you spent here are not taxed provided you've been filing your tax returns.
Untrue - your 'Ties' to the UK are assessed individually and a decision is made as to whether you are non-resident for tax purposes and whether you pay taxes or not. You don't decide you are not tax resident - thats determination which HMRC make and its not as simple as others make out.

For example a tie might be a family home, it might be a situation here you have investments in the Uk and the family members who reside in the UK. Too many 'ties' and you end up paying taxes even if you stay out 365 days every year. The old days of 'stay out for the year and you will be okay' are well gone and completing the tax return doesnt mean the taxman will not judge you to owe at some time in the next seven years.

Get some professional tax advice from Nikkisizer on here and ignore the 'personal experience' experts here.
Fully agree about getting tax advice ..... but you can determine your own tax status if you choose to by using the guides that HMRC publish for that purpose ..... Ties are irrelevant if you meet any of the automatic overseas tests .... one of which is if you work full time overseas and don't return for more than 90 days in a given tax year. So those days are not well gone.

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Old 23rd April 2017, 06:10 AM
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Quote:
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Ties are irrelevant if you meet any of the automatic overseas tests .... one of which is if you work full time overseas and don't return for more than 90 days in a given tax year. So those days are not well gone.
Disagree - the automatic tests no longer apply. There are none any more. Oh if it were that simple. Ties are the primary determinant.

We agree advice is needed though.

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Old 23rd April 2017, 06:48 AM
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Quote:
Originally Posted by twowheelsgood View Post
Disagree - the automatic tests no longer apply. There are none any more. Oh if it were that simple. Ties are the primary determinant.

We agree advice is needed though.

Have a read of the SRT document published by HMRC in August 2016, the tests still apply and are referenced in that document. Unless of course it's been changed since August.

https://www.gov.uk/government/upload...nal_078500.pdf

Pages 9/10


Last edited by UKMS; 23rd April 2017 at 06:58 AM.
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