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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have recently lost my job in Dubai after being here for 9

Resolved Question:

I have recently lost my job in Dubai after being here for 9 years and overseas since 1995
I am selling my properties here and expect to realise £400,000 I never told the uk tax authorities when I left the uk as I was not given any advice. What are the implications of returning to the uk with this money, should I buy property in the UK whilst I am still here to avoid tax
Thanks Craig
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

Can you give me an idea of how much time you spent in the UK in a tax year since you left the UK please. What ties or connections to the UK do you have? Were you working for a UK or a local employer in Dubai?
Customer: replied 3 years ago.
Hi
I have been in the uk for no more then three weeks in any year since 1995 for the last nine years I have been in Dubai working for hotel groups both international and local we have no uk assets or property and only have family based there
Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.
Hi again.

The fact that you didn't inform HMRC of your move away from the UK should not be a problem if and when you return unless you left owing tax. It has never been compulsory to inform HMRC of a move abroad. The fact is you have been non-UK resident since 1995 under the old rules and the new rules for UK tax residency which came into effect on 6 April 2013. You can read about those here and here.

If you return to the UK before you sell your properties, you will have to pay Capital Gains Tax in the UK on any gains you make and the calculation of those gains will be based on the original purchase price unless they were bought before 31 March 1982, not the value when you return to the UK. To take a belt and braces approach, you really should wait until the sales of your Dubai property have completed before you return to the UK permanently.

The tax year of your return to the UK will be split into two periods, a period of non-UK residence starting on 6 April and ending on the day you are deemed to have became tax resident in the UK and the period from that day to the end of the tax year on 5 April. See paragraphs 5.26 to 5.46 in section 5 of RDR3 here.

The number of days that you can spend in the UK between 6 April in the tax year of your return to the UK and the date of your deemed return to the UK will be limited in accordance with Table F on page 60 of RDR3 here. You should also refer to the section "Arrivers" here which explains how the number of days you can spend in the UK are linked to ties to the UK. Fail this test and you will be resident for the whole tax year and your gains will be taxable in the UK even if you were not in the UK for much of the early part of the tax year when you sold the property. Again, a belt and braces approach would be to not visit the UK at all between 6 April in the tax year of your return and when you actually return permanently.

You have some leeway on your main residence. If you sold that after your return to the UK, provided it has been your main home for the entire period of ownership and the last 18 months if you were not living in it, any gain will be tax free in the UK.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.
Thanks for that info
If my wife and adult son return to the uk permanently before the properties are sold whilst I stay here does this have tax implications , also can you clarify if I can return with cash or should I buy property in the uk before I return
Thanks
Expert:  TonyTax replied 3 years ago.
You need to keep your ties to the UK down before you assume UK tax residence again so returning with cash may be the better option, though I doubt whether it will make much difference ultimately in your case, especially if there is not much of a lag between buying the property and moving back to the UK.

The same applies to your family insofar as they will be a tie to the UK if they are living in the UK before you.
TonyTax and other Tax Specialists are ready to help you
Expert:  TonyTax replied 3 years ago.
Thanks for accepting my answer.

Good luck in the future. The weather is still rubbish in the UK!