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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am working overseas. I pay tax on my company pension in

Resolved Question:

I am working overseas. I pay tax on my company pension in England. I have been offered a job in England that starts in September 2015. Will I have a tax liability for the money I have earned overseas?
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me how long you have been working and living overseas please. Where do you live and work? Are you employed or self-employed? Are you treated as non-UK resident for tax purposes? Will you leaving the overseas job and be returning to the UK permanently?
Customer: replied 2 years ago.

2 years at the end of august 2015. Grand Cayman. Employed. Yes. Yes.

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer. It will take a while so please bear with me.
Customer: replied 2 years ago.

Thank you

Expert:  TonyTax replied 2 years ago.
Hi again.

You should refer to section 5 of RDR3 here and the flowchart here as part of this answer.

As you appear to have completed a full UK tax year as a non-UK resident (6 April 2014 to 5 April 2015) you should not have to pay UK tax on your earnings from working abroad (under the split year treatment rules) provided you have worked sufficient hours abroad, you did not exceed the number of days allowed in the UK between the date of your departure form the UK and 5 April 2014 (see Table E on page 53 of RDR3 here), likewise for the year ended 5 April 2015 and you do not exceed the number of days in the UK that you will be allowed between 6 April 2015 and the end of the month in which you return to the UK. See Table F on page 60 of RDR3 here.

You need to be UK resident for tax purposes in the tax year of your return to the UK (2015/16), non-UK resident for the previous tax year (2014/15) and UK tax resident in the tax year following your arrival in the UK (2016/17) to qualify for split year treatment. Read through Cases 4 to 8 from paragraph 5.26 on page 59 to paragraph 5.46 on page 69 of RDR3 here to assess which of those will apply to your circumstances. Case 5 would appear to be the one that would apply to you. Provided you meet those criteria, the 2015/16 tax year will be split between the period from 6 April 2015 to the deemed date of your arrival in the UK and from that date to 5 April 2016. Any non-UK source income you had in the first period will not be taxable in the UK.

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