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I have just returned to the UK in January after living abroad

Resolved Question:

I have just returned to the UK in January after living abroad for just over 2 years.
I have lived in Italy and paid tax in Italy up to 31 December last year.
I have two UK savings accounts. One pays interest yearly in March, the other monthly.
I will have earnings from employment in the UK since January that exceed to tax threshold.
Am I due tax on the income from UK savings interest for:-
a) the whole year on both accounts.
b) since my return on the monthly account and the whole year for annual account
c) the period of the year since I returned for both accounts?
--- or d) something else.

Thanks John
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi John

Thanks for your question, I am Sam and one of the UK tax experts here on Just Answer.

Tax will normally be deducted from each of these accounts on any interest paid, but as you have been not resident in the UK for more than one full tax year, and I assume have not exceeded more than 90 days visits back to the UK (this is pro - rata'd for the part tax years) then you could have received the interest free of UK tax.

But since your return - the basic rate tax deduction made (unless you elected to have your interest paid gross due to leaving the UK) on that interest, is correct and no further action required UNLESS your income for any one tax year exceeds the basic rate threshold of £42,475.

So to recap - if you are paying no tax on the interest - then yes tax will be due on any paid since your return to the UK - and you will need to advise HMRC of the amounts paid.
If tax has been deducted but your total income is less than £42475, then you need do no more.
If your income for this tax year (or future years) is in excess of the basic rate band of £42,475, then further tax will be due.

Thanks

Sam


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