UK Residency for non-citizens

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UK Residency for non-citizens


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Old 28th August 2008, 11:05 AM
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Default UK Residency for non-citizens

I'm know similar questions have been asked. Previous answers have been informative, but still confusing for me. Can someone (Elphaba, help!) advise...

If job offer and stuff goes well, i should be relocating to Dubai 1st wk in october.
This is just over 183 days from 6 April. However i've been out of the country on holiday for approx 30 days within this period. Am i right that i can still claim to be a non-resident for this tax year? I'm pretty certain i won't be returning in the foreseeable future.

Does the fact that I'm not a Brit citizen (but am Commonwealth) change anything, in terms of the paperwork required and my tax/NI liabilities? Bearing in mind that
I'd like to keep my UK bank account and ISAs, but will have no sources of income within the UK. Might not even have a UK billing address.

Also, what do people leaving the UK permanantly generally do with their pensoin funds?

Cheers!


Last edited by Shinjuku; 28th August 2008 at 11:18 AM.
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Old 28th August 2008, 11:21 AM
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Quote:
Originally Posted by Shinjuku View Post
I'm know similar questions have been asked. Previous answers have been informative, but still confusing for me. Can someone (Elphaba please!) advise...

If job offer and stuff goes well, i should be relocating to Dubai 1st wk in october.
This is just over 183 days from 6 April. However i've been out of the country on holiday for approx 30 days within this period. Am i right that i can still claim to be a non-resident for this tax year? I'm pretty certain i won't be returning in the foreseeable future.

Does the fact that I'm not a Brit citizen (but am Commonwealth) change anything, in terms of the paperwork required and my tax/NI liabilities? Bearing in mind that
I'd like to keep my UK bank account and ISAs, but will have no sources of income within the UK. Might not even have a UK billing address.

Also, what do people leaving the UK permanantly generally do with their pensoin funds?

Cheers!
Hello!

UK tax liabilities are based on residency and not domicile. You will still need to complete HMRC form P85 on leaving the UK. Your income tax liabilty for this tax year depends on firstly in the number of days you spend in the Uk from 6th April. Over 89 days and you could be liable for tax. That said, if you remain UK non-resident for many years, you will not have a tax liability for the remainder of this year. The split year ruling (a concession) could come into effect, so provided you do not exceed 89 days in the Uk in the next five years, you should be fine.

You can retain a UK bank account (much easier in case you do return) and ISAs can again stay where they are, but you cannot make any further contributions. IN most cases UK pensions become 'paid up', that is monies remain invested, but little is allowed by way of additional payments. There has been much talk of QROPs, but these are not all they are cracked up to be and only suitable for large funds.

I hope that helps.


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Old 28th August 2008, 02:03 PM
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I think i see the light...

Quote:
UK tax liabilities are based on residency and not domicile. You will still need to complete HMRC form P85 on leaving the UK. Your income tax liabilty for this tax year depends on firstly in the number of days you spend in the Uk from 6th April. Over 89 days and you could be liable for tax. That said, if you remain UK non-resident for many years, you will not have a tax liability for the remainder of this year. The split year ruling (a concession) could come into effect, so provided you do not exceed 89 days in the Uk in the next five years, you should be fine.
So does this mean that, if assuming:
- i have spent 150 days in UK this tax year
- i do not return to visit the UK over the next few years
i willl only be classed as a non-resident from start of 2010/2011 tax year? (i.e. 75 day average per year over 08/09 and 09/10 tax years)
And any tax reliefs due for split year will only be received when i gain non-resident status?
Similarly, i won't be entitled to receive bank interest without tax as well?

If so, is there any practical benefit or legal requirement in submitting the P85 form before this date, besides having the paperwork sorted early?

Quote:
You can retain a UK bank account (much easier in case you do return) and ISAs can again stay where they are, but you cannot make any further contributions. IN most cases UK pensions become 'paid up', that is monies remain invested, but little is allowed by way of additional payments. There has been much talk of QROPs, but these are not all they are cracked up to be and only suitable for large funds
From above, if HMRC still classifies me as resident for 09/10, shouldn't i still be entitled to an ISA allowance for the year?

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Old 28th August 2008, 03:51 PM
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Not quite.

You complete HMRC P85 and it will be assumed that you are non-resident for tax purposes. You will only have a liability for the remainder of this tax year if you return to the UK too soon.

You cannot invest in an ISA for 09/10, but why would you want to when you would not be liable for tax on interest on bank accounts or on growth from investments as you would be living in a country without personal taxation?


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Old 29th August 2008, 08:07 AM
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Quote:
Originally Posted by Elphaba View Post
Hello!

UK tax liabilities are based on residency and not domicile. You will still need to complete HMRC form P85 on leaving the UK. Your income tax liabilty for this tax year depends on firstly in the number of days you spend in the Uk from 6th April. Over 89 days and you could be liable for tax. That said, if you remain UK non-resident for many years, you will not have a tax liability for the remainder of this year. The split year ruling (a concession) could come into effect, so provided you do not exceed 89 days in the Uk in the next five years, you should be fine.

You can retain a UK bank account (much easier in case you do return) and ISAs can again stay where they are, but you cannot make any further contributions. IN most cases UK pensions become 'paid up', that is monies remain invested, but little is allowed by way of additional payments. There has been much talk of QROPs, but these are not all they are cracked up to be and only suitable for large funds.

I hope that helps.


-
I agree. I spoke to my ex-employer's pension advisor and whilst he agreed that I could transfer it, he also stated that it might not be entirely beneficial and I could just leave it in the UK. I plan to do just that!

I would also advise that a mail redirection is set up to make sure that you get all your bank statements and other important documents. You certainly do not want your bank details falling in the hands of the wrong person, especially as you will be so far away and you just never know who will end up living at your old place. I've already redirected all my letters - do not want to find out that I have an identical twin!!!

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