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I am asking the same question again as I am now hearing conflicting

Resolved Question:

I am asking the same question again as I am now hearing conflicting answers , so again my question is ;

Hi ,

I have living abroad for nearly 20 years and plan to return to the UK on June 3rd . So I am officially non -resident.

My last working day with my company will be the 31st of May 2014. And I will not resume employment in the UK.

However as I may not receive my last salary BEFORE I arrive in the UK on the 3rd of June I assume that this last salary will still be classed as " tax free " from a UK tax perspective. So my question is do I also need to transfer i.e. empty my bank account here before I physically arrive in the UK or is it ok to leave my overseas earnings in my current bank account here and then transfer it to my UK bank account after my arrival in the UK.

Hope this makes sense !

Thank you .
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. In my reply I have assumed that whilst living abroad you never spent more than 90 days in the UK in any one tax year.

You should advise your HMRC tax office of your final return to the UK. Your tax year of arrival will be split in two, up to and after the return date. You will be classed as not resident in the before period and resident after. Earning for employment as non resident, even if received after the return date, will still be classed as outside the scope of UK taxation. As far as banking is concerned, for convenience, however, it may be a good idea to close down local banking arrangements before returning, but, of course, this may not be a realistic option. There is always the odd local bill to settle after departure!

I do hope I have helped you with your problem.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3607
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 3 years ago.

Thank you for your support.

 

For your utter confusion here is HMRC's notice on the matter. You will see that the split year is an extra statutory concession.

 

RDRM10420 - Residence: Liability to

UK Tax: Individual resident and not

resident in the UK in the same tax year

 

Strictly, an individual is taxed as a UK resident for the whole of a tax year when they are resident here for any part of it. But, if the individual leaves or comes to the UK part-way through a tax year, the year may, by concession, be split (extra-statutory concession A11).

 

This means that the UK Income Tax the individual should pay because they are resident here is calculated on the basis of the period they are living here rather than the whole of that tax year. This has the effect of splitting the tax year into resident and not resident periods for the purposes of calculating the tax due.

This split-year treatment will apply to individuals who:

  • come to the UK to take up permanent residence or to stay for at least two years, or
  • leave the UK to become permanently resident abroad, or
  • leave the UK for full-time service under a contract of employment for at least a complete UK tax year and any interim visits to the UK in the period do not amount to 183 days or more in any tax year or an average of 91 days or more in a tax year.

 

There is a further extra-statutory concession (A78) which also allows split-year treatment if an individual is accompanying their spouse or civil partner when they leave the UK to work full-time abroad, or in the year of return to the UK.

 

Although the rules for capital gains are significantly different from those for income, there is a split-year concession which relates to the chargeable gains of individuals who come to, or leave, the UK during a tax year (extra-statutory concession D2).

RDRM10135 and RDRM10245 tell you how the liability for the year of departure from, and arrival in, the UK is to be treated.

Customer: replied 3 years ago.

Yes , all very confusing .


 


However it does stipulate the tax year " may " by concession be split .


 


So how do you know if you personally i.e. me returning when the current tax year has started ( my return is June 2014 ) and will remain in the UK and possibly take up employment , how do I know how I will be treated ?


 


As " may " means they could possibly , I assume , tax me on my last months overseas salary which would be May 2014 and presumably also for practically all of April .


 


confused.com Thank you .


 


 

Expert:  bigduckontax replied 3 years ago.

It is perfectly normal for the departure and arrival years to be split as an extra statutory concession. For the period you are non resident any income accruing will be considered as being in the non resident period. In any event with most countries any tax suffered would be a tax credit against UK tax, but this should not arise. Just tell your tax office of your return.

 

I cannot see any reason why the concession will not apply. It's bog standard procedure.

Customer: replied 3 years ago.

Ok , I see , then nothing to worry about .


 


Thank you .

Expert:  bigduckontax replied 3 years ago.
I trust so!

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