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I am a UK citizen and have been working in the UAE

Customer Question

I am a UK citizen and have been working in the UAE for over 15 years
I am considering moving back to the UK this year to retire
In UAE, at the end of service (in accord with the UAE labour law)the companies pay a 'gratuity" consisting of 21 days pay per year for the first 5 years then 30 days pay per year for remaining service
my question is will this sum be taxable when I repatriate it to the UK
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 help you with your question. Firstly, when you originally left the UK did you send a Form P85 to the Inland Revenue? If you did not you should do so immediately, but of course to HMRC. Fortunately there is no time limit as to its submission, it is available on the net and can be filed on line. On receipt HMRC will classify you as non resident and you will find dealing with that Department much easier. On your repatriation advise HMRC. They will then class you as resident for the tax year following your date of return and furthermore split your return year into two portions, one non resident and the other resident. I would advise that, if possible, the first tranche of gratuity be paid to you before you leave the UAE. Once resident in the UK then your world wide income is subject to UK taxation so whether it is repatriated or not it is liable to UK taxation. You could elect to receive it on a remittance basis, but it costs you 30K per annum to enter into that arrangement where only the remitted sum is taxable and usually the process is confined to the likes of Russian oligarchs! I am so sorry to have to rain on your parade.
bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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