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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am working on an independent consultancy services contract

Customer Question

I am working on an independent consultancy services contract in Oman (See article 14 of UK/Oman Double taxation treaty).
I have saved approx 40,000 pounds and want to send it home prior to my contract ending at end of July 2015. Will this be taxable in UK?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to assist you with your question, Firstly, when you let the UK, did you send a Form P85 to your tax office? If you did not you should do so immediately. Fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. On receipt HMRC will classify you as non resident for the tax year following your departure date and furthermore split the leaving tax year into two portions, one resident and the other non resident. When you finally return to the UK you tell HMRC and the process is reversed. You retain your non resident status providing you do not spend more than 91 days in the UK in any one tax year. In theory this can be averaged out over four years, but the general consensus of opinion amongst experts on the Just Answer site is never to exceed the magic 91 days in any one tax year. If you get through all these hoops and are non resident then the 40K you have saved up from your Oman remuneration is not taxable in the UK and may be repatriated. However, you should warn your bank of the incoming funds and their source to avoid any money laundering inquiries the transfer of such a large sum might attract. Remember such off shore savings return from people working overseas is a very common occurrence. I do hope that I have set your mind at rest on this matter.
Customer: replied 1 year ago.

I left in 2003 and filled out the form and was NT No tax for many years until approx 2003 when I was put on emergency L1000 code for my private pension drawn in the UK (540 pounds a month), the residency criteria in UK changed around the same time.

I will lose my non residence when I return as I shall start work in the UK on 1st August. Is the money still free of taxation if I send it back before my arrival?

Expert:  bigduckontax replied 1 year ago.

It is normal for pensions to be taxed in the country of origin, hence the issue of a tax code to collect tax thereon. However, as you pension aggregates to GBP 6480 pa, well below the Personal Allowance, no tax should be being deducted.

The pension does not affect your non residential status. You should ask HMRC why they consider you resident since the P85 proceedure should have settled that and the matter of a pension is an irrelenace. Literally tousands of ex pats have pensions taxed in the UK, yet are non resident. It sounds to me as if HMRC have been making assumptions. HMRC are very keen on these and in my experience their ideas are invariably wrong and always in favour of the Revenue.

The money you have saved in the Oman, as you are a non resident, is not taxable on repatriation to the UK. Your non residential status ends when you notify HMRC of your return as I explained in my original response.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3615
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 1 year ago.

Thank you for your excellent support.

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