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Sam
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I am a non-UK citizen, I am in my second year of living in

Resolved Question:

I am a non-UK citizen, I am in my second year of living in the UK. I was made aware that there are certain tax advantages in depositing my income in a Jersey account for the first 3 years of living in the UK and that you only pay tax on the income you bring into the country (paying for bills etc), or the number of days you work in the uk whichever is higher.
I was also told that if I did this, the tax I do pay will not be given a the usual 10K allowance.
I would like to know if the above is true, and if so whether it is more economical to pay my salary directly into the offshore account or whether the loss of the 10K allowance will make it tax inefficient to channel my income through these means
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your questions - I am Sam and I am one of the UK tax experts here on Just Answer.
From where does your salary arise from,the UK or in Jersey and are you an employee or a director - as this sounds like you are being paid via an agency through an Umbrella company which has its own issues to contend with before your other questions can be answered, so please advise further
Thanks
Sam
Expert:  Sam replied 2 years ago.
Hi
And where do you undertake this work for which you are paid (in the UK or elsewhere)
Thanks
Sam
Customer: replied 2 years ago.

Most of the work that I am doing is in the UK, but my work involves me working on projects internationally. I do not have much foresight as to the projects I do in the next year will be international or not. If so they are likely to be in Europe.

In addition,

I am permanently employed by a UK company.

Expert:  Sam replied 2 years ago.
Hi Jesse
Then you remain liable to tax as things stand now in the UK as you live and work in the UK as a rule but as it would seem that you spend more than 90 days in the UK then you are a UK taxpayer whatever country your salary is paid to.
The loss of the 10K allowances relates to individuals that are treated as non domicile in the UK and have income earned or arising from abroad that does not come into the UK.
It would appear that this income arises AND is earned through work you undertake in the UK, so has a UK taxation on it.
If you move OUT of the UK but remain paid from the UK, then it may well be that your salary is NOT liable to UK tax (as long as your visits back to the UK are for less than 90 days each tax year and that none of them are for work purposes)
But as things stand - you are a UK taxpayer - and have been since your arrival in the UK
Thanks
Sam
Customer: replied 2 years ago.

Could you comment about the tax rule that allows foreign nationals (I am Canadian) to only pay tax on the income that they let into the country or the number of days they work in the uk?

Does this not apply to me as I am within the first 3 years and am being paid directly into an Jersey bank account?

Expert:  Sam replied 2 years ago.
Hi
That will not apply in this case - the fact you are paid into a jersey bank account and are within the first 3 years has no bearing at ll on this situation (which is why I have not offered advise on it)
The moment you arrived in the Uk you became UK resident, it was then just a question of your income to be reviewed as to its tax position.
This is NOT money you earn abroad and and comes from abroad, (when you have the right to be taxed under the remittance basis with a loss of personal tax allowances and after 5 years are charged the remittance basis tax charge) this is money you earn IN the UK and have arranged to be paid abroad, butiIt ARISES in the UK so remains liable to UK tax.
You should be declaring this income to HMRC and paying UK tax on it
Thanks
Sam
Customer: replied 2 years ago.

Hi Sam,

Great thanks for your expert advice.

So just to summarise so I understand.

All the money I earn that arises in the UK I am liable to pay tax on regardless of whether or not it is paid into a Jersey account.

Despite paying it into this offshore account (it is taxed at source, so no worries I am not evading taxes), I will still have my 10K allowance.

That is to say the 10K allowance is not voided by paying directly into the offshore account.

This is the last clarification I need.

Thanks again for your help!

Expert:  Sam replied 2 years ago.
Hi Jesse
Yes you have it !
Thanks
Let me know if I can be of any further assistance but it would be appreciated if you could rate (or click accept) as this ensures that I am credited for the level of service I have provided
Thanks
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13810
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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