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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13915
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I currently have been living in Grand Cayman

Resolved Question:

Hi
I currently have been living in Grand Cayman for the past 8 months (having moved here in April 2015) I have not worked in the UK (paid tax) during the current financial year 2015/2016. I have been offered a new job in London and have accepted (start date 4th Jan) I fully understand that I will once again be paying PAYE upon my return. I need to understand however what my tax liability is for my time here in Cayman? I filed a P85D when leaving the UK so that I could rent my house (only pay tax on uk income)
Regards
James
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi James Thanks for your question You will be liable to UK tax on your rental income in the UK (which was always going to be the case) and then liable to Uk tax on the job you will start from 5th Jan 2015 and any foreign income you earned in the Grand Cayman from April 2015 to 3rd Jan 2015.This is because you will be treated as resident for the year as you did not complete a whole tax year living out of the UK So at 05/04/2016 when you complete the self assessment tax return you will complete the main return and employemnt page for Uk employment, and possibly one for the foreign income, then a UK property page and a foreign page (if foreign income) and a residency page to advise HMRC what time you did spend out of the UK Then you will be allocated personal allowance for the whole year - and any tax you may owe will be due to HMRC no later than 31/01/2017 Let know if you have any queries on my answer or I can assist further with our question Thanks Sam
Customer: replied 1 year ago.
SamThanks for the replyIf I stay in Cayman until the end of this financial tax year 2015/2016 i.e return to the UK on the 7th April what would the situation be then? I would have only spent 15 days in the UK (holiday) for that entire year.James
Expert:  Sam replied 1 year ago.
Hi James
Apologies for the delay in my response, I have been with clients this morning.
Much will be dependent on what date you left the UK - was this before 06/04/2015 or after (or on 6th April)
Please also advise what the 15 days visits were for holiday/family visits or work purposes - if work purposes did this involve just meetings or training ?
Thanks
Sam
Customer: replied 1 year ago.
Samwe flew out on the 8th April (i left my previous employment on the 27th March) I only came back for a holiday in the summer (when my sister got married) we plan to come back on the 7th April 2016 meaning the financial tax year would of finished. I also would of only been in the uK for 15 days throughout the entire financial tax year
Expert:  Sam replied 1 year ago.
Hi
Then I am afraid you will not complete a full tax year until after 05/04/2017 (as the year has to fully cover pre 5th April to post 5th April - then the sufficient ties tests will apply.
Can you advise other than the property - did you have main family (such as spouse or children under 18 left in the UK) and employment ties, and you did not exceed more than 90- days in the UK -
So I assume you just had the one in which case you will be treated as not resident if you remain out of the UK beyond 05/04/2016 which means you will only need to declare the rental income and any employment Income (which you indicate is NIL as you ceased employment 27 March 2015) from which you have personal allowances to offset (so £10,600 allowances - and 2 x allowances if the property is in joint names with your spouse/partner)
Do let em know if I can be of any further assistance
Thanks
Sam
Customer: replied 1 year ago.
SamIs this the case even though I did not work in the uk and would have been here less than the 16 day cut off period for the 2015/2016 year?No family was left in the UK, my wife and daughter came out here with me. I have no employment ties as I will be starting a new job with a new employer on the 11th April 2016.regardsJames
Expert:  Sam replied 1 year ago.
HI James
Yes as the sufficient ties test looks at the time actually spent in the Uk and why and ties - and you had one tie - the property you rented out -
So when you get back to the UK and resume employment just make sure you advise HMRC of your new address in the UK (rather that let the information filter through from your new employer) then the tax return notification will be activated to you for you to complete the 2016 tax return.
You then will complete the main return - with UK property and Residency and get that back to HMRC by 31/10/2016 (if you plan to do this yourself as evemn the online HMRC free services will not allow a residency part of the return to be filed - so it will have to be the paper version)
Let me know if I can assist any further - but it would be appreciated if you rate the level of service I have provided, or click accept
Thanks
Sam
Customer: replied 1 year ago.
SamOn the HMRC website it states the followingWork out your residence status
Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year).You’re automatically resident if either:you spent 183 or more days in the UK in the tax year
your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
You’re automatically non-resident if either:you spent less than 16 days in the UK (or 46 days if you haven’t been classed as UK resident for the 3 previous tax years)
you work abroad full-time (averaging at least 35 hours a week) and spent less than 91 days in the UK, of which less than 31 days were spent working
Expert:  Sam replied 1 year ago.
HI
Yes thats what I have advised = you will be treated as not resident and only considered on the rental income (as that arises in the UK)
BUT you did NOT spend a whole tax year out of the UK - as you did not leave the UK until AFTER 05/04/2015 so I had to then advise on the sufficient ties test for which you DO qualify.
Thanks
Sam
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Customer: replied 1 year ago.
SamThanksSo are you saying even with the ties i will still be liable for tax on income abroad?
Customer: replied 1 year ago.
SamI cannot thank you enough! thanks for making this clear and concise! I really appreciate your help on this matter.James
Expert:  Sam replied 1 year ago.
You are very welcome James, I appreciate you want to be sure you have it right !
Thanks
Sam
Customer: replied 1 year ago.
SamIts now clear that I am liable for tax on the income from my property, but not liable for tax on earnings made over sea for the tax year.I can now calm down! :)James
Expert:  Sam replied 1 year ago.
Hi James
You have it in a nutshell (but not under the normal residency rules but due to the fact that you spent so few days in the UK and that you do not breach the ties in the UK tests - so under the sufficient ties tests)
Thanks
Sam
Customer: replied 1 year ago.
SamSorry I forgot to ask one more thing, my wife is planning to visit the UK over christmas and new year, she has already been back once for 25 days. Does this have any bearing at all on my tax status, shes doesnt work in the UK or here in Cayman.ThanksJames
Expert:  Sam replied 1 year ago.
Hi James No bearing on your wife as she will still be within the allotted days (90) in total and she only has at most half share of the rental income (if in joint names) - which will remin liable to UK tax anyway Thanks Sam
Customer: replied 1 year ago.
Thanks Sam
Expert:  Sam replied 1 year ago.
You are very welcome - have a great weekend ThanksSam