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TonyTax
TonyTax, Tax Consultant
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I have the following question re to potential UK tax on

Resolved Question:

Hi, I have the following question re to potential UK tax on foreign income. In short,
- I work full time abroad (Czech Republic)
- I will be in UK less than 90 days during the tax year
- My family will live in the UK (my wife will rent a house)
Based on above, will I have any personal income tax exposure in the UK?
Thanks for your help,
Peter
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.Can you tell me exactly when you went to work abroad and how long you intend to stay there please.
Customer: replied 1 year ago.

Hi, to clarify, I have never been UK resident previously (so, have been working abroad for the last 20 years). situation is that I am resident in Czech Republic and we have decided that my wife and children will move to London.

hope this helps.

Per

Expert:  TonyTax replied 1 year ago.
Thanks.

Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi again.

Many UK nationals leave the UK to live and work abroad and leave their families in the UK and provided they meet a few rules, they can avoid having to pay UK tax on their foreign earnings even if they send money home to pay the bills etc.

You should look at the notes here and here. The first link gives a brief synopsis of the statutory residence test which came into force in the UK on 6 April 2013. The second link has the detailed rules.

Provided you don't spend more than 90 days in the UK in any one tax year (6 April to 5 April) and you work the required number of hours in the Czech Republic, you should not pay any UK tax. Even if you did, the Czech tax you pay would be offset against the UK tax liability under the terms of the Double tax treaty between the two countries.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

Hi, thanks for further info.... almost there : )

I am not a UK national (I am Swedish), but I am not sure if this makes a difference in this context.

Just two additional / final questions;

1. one of your links goes to Shipleys.com where they refer to prerequisites for UK residency; more specifically - "you have a UK home for a period of 91 consecutive days or more (of which at least 30 days must fall in the tax year), you spend at least 30 days in that home in the relevant tax year, and during this 91 day period you have no overseas home, or have one or more homes overseas and are present in each of these overseas homes for less than 30 days during the tax year in question; " --> my wife (who will be renting a house) and children will be living in London and I will be visiting them less than 90 days. However, during the same time I will have an overseas home (i.e. renting an apartment in Prague). I assume that based on my situation I will not be seen as UK resident from this perspective, or?

2. With ref to the double tax treaty - I understand that I will not be exposed to double taxation, however as the tax in Czech rep is lower than the UK (say approx 18%-points) will I be 'grossed up' (i.e. paying the difference of 18%-points) with UK tax?

thanks a lot for your help

Expert:  TonyTax replied 1 year ago.

It doesn't matter if you aren't a UK national (but see 2 below).

1 If you look at the rules for automatic non-UK residency, at the end of each one it says "or". The one that covers you is "you carry out what is effectively full time work overseas [see definition A below];". Provided you meet one of the tests for automatic non-UK residency, you don't need to consider the UK residency tests.

2 There could be more UK tax to pay if the Czech tax rates are lower than the UK rates but there will be the personal allowance to use against the income. Because you are no UK domiciled, you could use the remittance basis of assessment whereby you only pay UK tax on UK source income and non-UK source income you remit to the UK but you would need to be UK resident for tax purposes for that to be an option.

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