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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Dear team, I am a UK citizen, currently living and working

Resolved Question:

Dear team,
I am a UK citizen, currently living and working in the UK for a UK-based employer.
I am considering moving to the Netherlands and applying for Dutch residency. I would continue to work for my UK-based employer, and would divide my time between UK and Netherlands (1 week per month in UK, 3 weeks in Netherlands). Therefore I'd be spending approximately 75% of the year resident in the Netherlands.
However I am not sure what the tax/legal implications of this situation would be.
I understand that if I become a resident of the Netherlands I will be required to pay tax there, even if the company I work for is in the UK. However because I plan to spend some time each month working in the UK, I presumably have to pay tax there also. (I am aware that the two countries have a dual-tax agreement meaning that in theory, I should not be taxed twice on the same income).
Do you have any experience of individuals in this situation, and if so, are you able to offer any advice on what is required? I'm interested to know what steps are required in order to move forwards with this, from a legal/tax point of view.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.I will revert to you shortly with my response. Many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your patienceYour question is-I am a UK citizen, currently living and working in the UK for a UK-based employer.I am considering moving to the Netherlands and applying for Dutch residency. I would continue to work for my UK-based employer, and would divide my time between UK and Netherlands (1 week per month in UK, 3 weeks in Netherlands). Therefore I'd be spending approximately 75% of the year resident in the Netherlands. I understand that if I become a resident of the Netherlands I will be required to pay tax there, even if the company I work for is in the UK. However because I plan to spend some time each month working in the UK, I presumably have to pay tax there also. (I am aware that the two countries have a dual-tax agreement meaning that in theory, I should not be taxed twice on the same income). AnswerWith effect from April 2013, there are new rules governing residency for tax purposes.Based on information provided by you, you would still be providing services in the UK for 1 week per month around 90-91 days. You would have sufficient UK ties to make you a UK resident for tax purposes. The UK ties that are taken into account are namely:- Having a spouse, civil partner or minor children resident in the UK.- Having accommodation in the UK that is made use of during the tax year. The definition of what counts as accommodation is quite detailed, but it generally does not include owning a property that is let out, short visits with relatives, and stays in hotels.- Doing substantive work in the UK. This is defined as working for 40 or more days during the tax year (a working day is as per previously defined).- Spending more than 90 days in the UK during either of the two previous tax years.- Spending more time in the UK during the tax year than in any other single country. It would appear that you would meet at least three UK ties. As UK resident you would be taxed on your worldwide income. If this income has suffered any tax in The Netherlands, then you would claim foreign tax credit relief against tax suffered in that country. You would complete supplementary pages SA106-Foreign in addition to the main tax return and claim FTCR.More information on SA106-Foreign can be found herehttps://www.gov.uk/government/publications/self-assessment-foreign-sa106 Also attached are some notes from my accountancy body on new statutory residence test rules that you may find helpful.http://www.accaglobal.com/ie/en/discover/cpd-articles/taxation/fa13-statutoryresidence.html I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
Thanks for your response. I understand that following a move the the Netherlands, I could assess myself as UK resident for tax purposes provided I meet the criteria, then declare my worldwide income, and then claim FTCR where the Netherlands has taxed me for that income.Thanks also for accommodating some follow-up questions.1. "Having accommodation in the UK that is made use of during the tax year" - would this include renting a room from a private landlord for those weeks I am in the UK?2. My employer currently handles my tax obligations. Following a move to the Netherlands, how would I be expected to submit my self-assesment forms, apply for FTCR, report on my worldwide income to the UK/Netherlands tax services, etc.? Should this be handled by my employer, or would I be expected to handle this?3. If I self-assess as UK resident for tax purposes, is there any conflict in also registering with the Dutch authorities as a physical resident of the Netherlands?Many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thanks also for accommodating some follow-up questions.1. "Having accommodation in the UK that is made use of during the tax year" - would this include renting a room from a private landlord for those weeks I am in the UK?Answer Yes --- see page 81 of RDR3https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/458559/RDR3_govuk_hyperlink__updated_078500.pdf 2. My employer currently handles my tax obligations. Following a move to the Netherlands, how would I be expected to submit my self-assesment forms, apply for FTCR, report on my worldwide income to the UK/Netherlands tax services, etc.? Should this be handled by my employer, or would I be expected to handle this?Answer - you would be expected to handle this yourself unless you appoint a tax agent 3. If I self-assess as UK resident for tax purposes, is there any conflict in also registering with the Dutch authorities as a physical resident of the Netherlands?Answer - There should not be a conflict .. you just have to make sure you get appropriate foreign tax credit relief. I hope this is helpful and answers your question.If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes.