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TonyTax
TonyTax, Tax Consultant
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I am UK citizen, but not a UK resident. I intend to move back

Resolved Question:

I am UK citizen, but not a UK resident. I intend to move back to the UK around May/June with my wife. She's a Chinese national and we're moving to the UK for the purpose to get her UK citizenship. My questions are:
1:
After how long of being in the UK will I be considered a UK resident and be liable for taxes?
2:
Can I bring money into the UK before becoming a resident tax free?
3:
If my wife becomes a resident before I become one, will my earnings still be taxable as we're married?
4:
I get paid a salary and pay taxes on my salary in Hong Kong. If I'm living in the UK and a resident of the UK, will I have to pay double tax (HK and UK)?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

I am taking a look at this and will post an answer as soon as I have finished. There is a fair amount to get through so please bear with me.
Customer: replied 2 years ago.

OK thanks for your reply, just let me know if you need any further information from me.

Expert:  TonyTax replied 2 years ago.
Thanks.

Can you tell me when you left the UK please.
Customer: replied 2 years ago.

Yes, I left the UK in 1987 and come back to visit once or twice a year, never for more than 7-10 days per trip.

Expert:  TonyTax replied 2 years ago.
Thanks.

As I said it will take a while to draft my answer and you will be notified by email when I have posted my answer.
Expert:  TonyTax replied 2 years ago.

Hi again.

You should refer to RDR3, the notes here and the flowcharts here as part of this answwer.

1 You need to put yourself through a number of mechanical tests to determine whether you will be UK resident for a particular tax year or not. One of the flowcharts will tell you if you qualify for split year treatment for the tax year of your arrival in the UK.

Sometimes, you may not know definitively whether you are UK resident or not until after the end of the tax year and all your circumstancesa re considered but if you come to the UK with the intention of staying and you arrive early enough in the tax year, you will probably be able to tell whether you will be UK tax resident or not.

If you don't meet any of the criteria for being non-UK resident or UK resident, then you will need to consider the number of days you have spent in the UK in the tax year with the number of defined UK ties you have. Click on the second link above. You would be treated as an " Arriver" for this purpose as you have been out of the UK for over three years.

I ask people to look at the tests and if they throw up questions, then I'm happy to take them up. There is no one size fits all answer and I don't want to just say, if you do this then this or if you do this then that. That will just cause confusion.

2 Yes, you can. Many non-UK residents have UK back accounts. You would normally only pay UK tax on foreign income after the date your UK tax residence commences.

3 Not necessarily. This goes back to the number of days you spend in the UK and the number of defined UK ties you have. Many UK nationals work overseas in places like Afghanistan or Iraq or the Middle East or the Far East generally and leave their families behind in the UK without harming their non-UK resident status but they are limited to the number of days they can spend in the UK in a tax year.

4 This can be difficult. If you look at Article 14 of the UK/Hong Kong tax treaty here, you will see that your HK earnings will be taxable in the UK soley if you do the work in the UK but they will also be taxable in Hong Kong if you do the work in Hong Kong. It goes on to that you will be taxable solely in the UK on your HK earnings if you are in Hong Kong for less than 183 days in any 12 month period, you are paid by an employer which is not resident in Hong Kong, your pay is not paid by a fixed base that your employer has in Hong Kong and the earnings are taxable in the UK.

If the earnings are taxable in both countries, you will get credit for tax paid in Hong Kong against your UK tax liability on the same income.

I hope this helps but let me know if you have any further questions.

Customer: replied 2 years ago.

Hello, thanks for the answers. It's quite complicated. Just 1 clarifying question. When I do come back to the UK, I intend to bring around 1/2 million pounds which will be used to buy my house (not sure where yet). Would that amount ever be taxable as it was earned totally while not being a UK resident? Thanks.

Expert:  TonyTax replied 2 years ago.
You need to keep a record of your assets immediately before you come back to the UK, account balances etc. So long as none of the money you bring back to the UK after you become tax resident in the UK is earned after you become UK tax resident, you won't pay UK tax on it.

As a UK national and when you are UK tax resident, you are taxable on your worldwide income. Income and gains earned before you become UK resident will not be taxable in the UK.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15883
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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