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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 moved to Dubai from the UK in July this year. I intend to

Resolved Question:

I moved to Dubai from the UK in July this year. I intend to stay until August 2016 and then go travelling until the end of the tax year in April 2017. This would mean that I would have been out of the UK for a whole tax year (April 2016 - April 2017). I believe the current year would be treated as a split tax year as I was working full-time for the tax year of 2015 from April to July in the UK and then left the country. I know this is a grey area but I have no other ties to the UK in terms of earnings, dependents or owned properties and I only intend to visit for around 30 days from April 2016 - April 2017. Before I left, I filled in form P85 and sent it to HMRC, including Parts 2 and 3 of my P45 form and, as a result, I already have had a tax rebate on my earnings from April 2015 - July 2015 in the UK.
When I return to the UK in April 2017, am I likely to have to pay any tax on my earnings from Dubai? I'm under the impression that as long as I am away from the country for the full tax year, I'll be OK. Also, if I transfer money to a UK bank account before then, will this be treated as taxable? Am I better off keeping my money in my Dubai bank account until April 2017 to ensure it stays tax free?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Let me take a look at this and I'll get back to you.
Expert:  TonyTax replied 1 year ago.
Hi again. You should refer to RDR3 here and a summary of the rules here. One of the reasons you can use to establish non-UK residence is working full time aborad. There is a set number of hours you are supposed to work and if you stop working part way through the 2016/17 tax year, you may not achieve the required hours. Therefore, you may not be automatically non-resident for 2016/17. You probably won't be automatically UK tax resident either so you will need to consider the UK ties you have to determine the number of days you can spend in the UK and remain non-UK resident. Section 2 of RDR3 explains the ties which need to be considered. The table for "Leavers" here matches the number of ties to days spent in the UK. Based on what you have said, spending 30 days in the UK in 2016/17 would require you to have 4 UK ties for you to be considered UK tax resident for that tax year. Therefore, you should be able to avoid paying UK tax on your foreign earnings. Transferring money to the UK won't adversely affect your tax residency status. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Hi Tony,Thanks for the detailed response. Very helpful. Just to clarify one thing, can you point me in the direct of where to find the set number of hours you are supposed to work abroad to be considered non-resident in one tax year?
Expert:  TonyTax replied 1 year ago.
Start from page 10 in RDR3 here:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/458559/RDR3_govuk_hyperlink__updated_078500.pdf
Customer: replied 1 year ago.
Perfect. I think I should be OK potentially on two instances. As there would be a period of unemployment of me at the end of the tax year 2016-2017 (from August - April), it looks like I can deduct these days from my reference period for the calculation. I wouldn't start UK employment again until after that tax year. I might be incorrect.If that fails then I only have two ties to the UK, so this would cover me from paying tax.Thanks
Jordan
Expert:  TonyTax replied 1 year ago.
I think you should be OK as long as you limit your days in the UK.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15763
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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