NON-UK RESIDENTS RESIDENCY APPRAISALS
As a UK-Resident you will be liable to tax assessment on your worldwide income. If you are thinking of returning to the UK to live, work, or even spend extended time here, then you will become taxed as a UK resident. If you are looking to spend more time in the UK, then there is likely to be a specific date when you will trigger the UK Residency criteria. Possibly you may even find that you trigger the criteria prematurely if you spend too much time here by accident.
Residency is a very complex area of tax, and no two sets of circumstances are identical. We can consult on your specific personal circumstances to advise on the tax parameters so that you can understand at what point you will become either UK tax resident, or how to continue protecting your UK Non-Resident status. If you are planning any significant life changes that might involve moving to the UK or spending more time here, it is of vital importance to consider your tax position before making any big decisions such as selling property or other investments.
Protecting the Non-Residency tax status is of prime importance for a lot of our clients – did you know that you could spend a little as 46 days in the UK and trigger UK residency status if you have other additional ‘ties’ to the UK!
UK Residency and Non-Residency is an area of tax that we specialise in. It is always best that you look to seek information from a specialist tax consultancy and not a standard accountancy practice as many accountants only have a very basic awareness of the complex non-residency issues.
Taxation of your Worldwide Income
Even if you already pay tax overseas on your foreign investments or incomes, you will also be liable for UK tax assessment on all of your income once you become a UK tax resident. Depending upon the type of income involved and the country where the income has already been taxed, you may be able to claim Foreign Tax Relief by way of a credit in the UK. Sometimes this relief is capped or restricted depending upon the wording contained within any Double Taxation Treaty.
As a UK Resident you will enjoy personal tax-free allowance all of the time that you are resident here, regardless of your nationality. This can help to go some way to help reduce any tax payable in the UK.
UK TAX RETURNS WE ASSIST CLIENTS WITH COMPLEX RESIDENCY ISSUES DAILY. WE ARE FULLY VERSED ON A WIDE RANGE OF TAX ISSUES THAT YOU MAY BE CONSIDERING AHEAD OF ANY MOVE EITHER TO OR FROM THE UK – SPEAK TO US TODAY FOR AN INITIAL, NO OBLIGATION CONSULTATION TO SEE HOW WE CAN ASSIST YOU FURTHER.
cONTACT AN EXPERT today
Split Year Treatment
It is possible to have the tax year split into the UK part of the year, and the non-UK part of the year if you meet specific criteria when either you first arrive or when you leave the UK. If you meet any of the relevant criteria, then declaring split year treatment to HMRC is not optional. It will clearly define the date when you either became, or finished, as a UK resident and will determine the tax treatment of your worldwide income.
If you have successfully become a non-UK resident and then return to the UK after a shorter period, you may find that you could be classed as only temporarily non-resident. If you have only left the UK on a temporary basis, you will certainly need to look at your tax position carefully as you may find that some of your previously exempt income and gains become taxable in the UK on the date of your return to the UK.
Double-Taxation Agreements (DT)
The UK is in a unique position whereby it has more Double-Taxation agreements in place that any other country worldwide – 149 at the last count. A DT agreement between two countries effectively sets out the tax treatment for different sources of income and stipulates in which country the income is taxed, or if this income is to be assessed twice. When a DT agreement exists between two countries then you can usually apply for a tax credit against your income so effectively you are not paying the same tax twice. However, sometimes the rate at which you can claim the tax credit is restricted. A DT agreement is a specialist piece of tax legislation that will dictate the exact treatment of taxation across a wide range of issues.