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bigduckontax
bigduckontax, Accountant
Category: Tax
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Sam I started my job in Kuwait from 2nd Aug. I was with M. Hari Process Consultants Lt

Customer Question

Hi Sam
I started my job in Kuwait from 2nd Aug. I was with M. Hari Process Consultants Ltd till 30th June this year. The company is now closed. I would like to get a confirmation on my understanding which says if I work in Kuwait >182 days, my income shall be tax free.
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.

When you left the UK for Kuwait did you complete a form P85 and send it to your tax office? If you did not you should do so immediately; fortunately there is no time restriction on its submission, it is available from the web and can be filed on line.

On receipt HMRC will classify you non resident for the 16/17 tax year and furthermore split the 15/16 tax year into two portions, one resident and one non resident. The form provides for the refund of any over paid Income Tax (IT) on departure.

As you may be aware if you spend more than 183 days in the UK in any one tax year you are liable to IT on your world wide income, but your departure date has you under that and the P85 procedure protects you with the split year principle.

I do hope that my reply has been of assistance.

Customer: replied 1 year ago.
Hi Keith,

Good morning. Thanks for your response.

I knew the information already from my accountant and am aware about form P85. However, I am seeking to get a clear advice on SRT as my family will be based in UK for some time and I will be visiting UK to see my family.

Looking at the various tables on SRT, I am bit unclear if I work for more than 182 days in Kuwait how come different criteria / ties are applied to show me as Resident. I'm not really convinced with the concepts of different ties. Most of them prove one as a Resident.

Are you 100% sure that I will be treated as Non Resident when worked for more than 182 days in Kuwait.

What if they second me to the contractor's office somewhere else eg. South Korea for few months let's say 2.5 to 3 months in a go.

Also, is there any limitation to my days spent with family while on annual vacation in UK during the FY 2015 -16?

I went there with the idea of tax free income and would like to get a confidence on that.

Hope I made my view clear to you.

Sorry, I just realised I had replied to you email earlier after receiving an answer. I should have replied to this box.

Many Thanks.

Best Regards,

Mayur Thakkar

07985672335
Expert:  bigduckontax replied 1 year ago.
It is not the time you spend in Kuwait which matters, but the time you spend in the UK. If you exceed 183 days in the UK in any one tax year you will be liable for UK Income tax on your world wide income. If, for example, you are a one month on one month of oil industry worker and come back to the UK every trip they you will remain resident for tax purposes. A friend of mine in is this situation.
Regarding returning to the UK whilst working overseas to retain your non resident status you should not spend more than 91 days in the UK in nay one tax year. Whilst in theory the days can be averaged over 4 years the general consensus of opinion amongst experts on this site is never to exceed the 91 days.
I hope that helps Mayur.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.

That's great Keith.

Thanks a lot for your response.

I will now go and post my P85 along with P45 parts 2&3 to HMRC.

Best Regards,

Mayur Thakkar

07985672335

Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance, Mayur.
Thank you for your support.
Customer: replied 1 year ago.

Same here. I hope I don't pay any extra on the same subject if I need to get a bit more information on my query in future if that's the case. I hope it should all get through nicely.

Thanks again.

Have a great day n weekend ahead.

Regards,

Mayur

Expert:  bigduckontax replied 1 year ago.

We are always here at Just Answer to assist, either me or one of my colleagues.

Customer: replied 1 year ago.

Thanks.

Expert:  bigduckontax replied 1 year ago.

No problrm.

Customer: replied 6 months ago.
Hi Keith,Happy New Year to you and your dear ones!I had your advice last year if you recall.Can you please call me back on 07985 672 335 to discuss something in more details?Thanks
Regards,Mayur
Expert:  bigduckontax replied 6 months ago.

I would love to call you Mayur, but I am currently operating from a time zone 7 hours ahead of the UK so it would be both expensive and in-practical. Can you not put your follow up in writing on this thread?

Customer: replied 6 months ago.
Hi Keith,
Good morning.
Thanks a lot for getting back to me inspite of being in a different time zone.
The only thing I wanted to confirm if Split year treatment still applies to me for FY 2015-16 based on your previous advice last year as I have been made redundant from Kuwait in 15th October 2016 due to oil market downturn and I came back to UK on 15th October 2016.Overseas start date was 2nd August 2015 and redundancy date was 15th Oct 2016. You know the whole background anyway.I an approaching a self assessment due date.
Thanks again.
Best Regards,
Mayur
Expert:  bigduckontax replied 6 months ago.

As far as I can see Mayur, in this highly complex situation, you can have a split year basis for two consecutive years, one 15/16 when you left and another for 16/17 when you unexpectedly returned. You will have to explain this relatively exceptional situation to your tax office.

Customer: replied 6 months ago.
Thanks Keith. I will speak to HMRC tomorrow.
Regards,
Mayur
Expert:  bigduckontax replied 6 months ago.

Pleased to have been able to assist.

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