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bigduckontax, Accountant
Category: Tax
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I was working in Hong Kong on behalf of my employer between

Resolved Question:

I was working in Hong Kong on behalf of my employer between April 2013 and December 2014.
Prior to working in Hong Kong I submitted a P85 form to HMRC, I was classed as non-resident in the UK, and HMRC issued an NT tax code.
I paid all income tax that was due between April 2013 and December 2014 to the Hong Kong Inland Revenue Department.
When the project that I was working on in Hong Kong came to an end, I was offered voluntary redundancy by my employer in December 2014 and took it.
I have not worked since December 2014 overseas or in the UK.
I have no property in the UK and have no ties to the UK.
I met a local Hong Kong woman in July 2013, we are married, and when I was made redundant I decided to remain in Hong Kong living with her.
Throughout my 35 year career with my employer I paid into a personal Pension Plan.
On my 55th birthday in December 2015 I drew my personal pension which paid me a lump sum and also pays me lifetime monthly allowance.
HMRC are aware that I will remain living in Hong Kong for the foreseeable future, and have issued my tax code for 2016-2017 which remains NT.
I was thinking of using my lump sum to buy a property in the UK, but not renting the property out.
My plan would be to live in the UK between May and October but returning to my wifes home in Hong Kong during November and April.
My question is would buying a property in the UK, and living in the UK between May and October impact on my non-resident status and make me liable to pay UK tax on my pension monthly allowance?
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. Once HMRC have received a P85 they will classify you as non resident for the tax year following your date of departure and furthermore split the leaving year into two portions, one resident and one non resident. Once classified as non resident under the P85 procedure you may only spend 91 days in the UK in any one tax year without breaching your non resident status although in theory this can be averaged out over five years. The general consensus of experts on this site, however, is never to exceed the magic 91 days in any one tax year. Your intention to live in your new house May to October would firstly breach the 91 day rule and put your non resident status at risk and is perilously close, indeed over, to the 183 days residence needed to make your world wide income liable to UK taxation. You would be well advised to revise your plans. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
Hi Keith,
Many thanks for your very quick answer.
I don't understand not exceeding 91 days in the UK and 183 days residence?
What is the difference between these?
Expert:  bigduckontax replied 1 year ago.
These are two entirely different things. Under the P85 procedure once you are classified as non resident the maximum number of days you can spend in the UK in any one tax year is limited to 91 days without breaching your non resident status. If you reside in the UK for over 183 days in any one tax year you are liable for UK taxation on your world wide income mitigated by any taxes paid overseas in countries with Double Taxation Treaties with the UK. Here is a quick resume from the Gov UK web site: 'You’re automatically resident if either:you spent 183 or more days in the UK in the tax yearyour 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 yearYou’re automatically non-resident if either:you spent fewer 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 fewer than 91 days in the UK of which no more than 30 days were spent working'
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3356
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 1 year ago.
Ah, thanks for this Keith.
Many thanks for your help.
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance. Thank you for your support.

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