replied 1 year ago.
Thanks 'Tony Tax' (love the name btw). I have a few other questions, which I think are all related/follow-up: however, if you think these are separate questions and require further fee, please let me know. I do prefer email communication, due to work situation, and also so that I can update my husband more easily.The reason I was confused was because a tax advisor offering free initial consultation recently seemed to advise my husband that - to qualify for split-year treatment in 2015/16 - his allowed days in the UK for 2015/16 and 2016/17 were reduced because of to the '3 sufficient ties rule', specifically the days allowed in the UK after he had started his work abroad on 22/5/15. Although I could not find any hmrc guidance that would indicate this. Specifically, he said that:a) my husband was only allowed in the UK for 45 days between 22/5/15-05/04/16 (not 82 days as I had read), due to 3 sufficient ties (accommodation he could use here, family tie, more than 90 nights here). I thought this did not matter, as my husband would already be considered UK-resident for 2015/16 - but your view on this point would be appreciated. For clarity, my husband was in the UK from 6/4/15-21/5/15 (approx 46 nights - less 4 nights holiday in ROI), before his overseas contract started; and 55 nights during his period of working abroad from 22/5/15-5/4/16. In retrospect, maybe the tax advisor was trying to help us see if my husband was non-resident for 2015/16!?b) that my husband is only allowed in the UK for 45 days in 2016/17 because the 3 sufficient ties rule (family, 90 days, available accommodation) - whereas I had thought this was 90 days, as I think he will meet the 3rd automatic overseas test for 2016/17.
3 related questions here:
1) if my husband does meet the 3rd automatic overseas test for 2016/17 (which I think he does, and can prove, as regards ***** ***** hours, accommodation use abroad, in UK less than 91 days, and does not work here) - do the 3 sufficient ties matter, or reduce the days he is allowed here from 90 down to 45 as the advisor suggested? I think you have answered this one previously, but want to be absolutely clear - I can't find any hmrc guidance that would suggest this is the case, but am uneasy as this is what my husband seems to have been advised previously.
2) Is the nature of my husband's accommodation abroad and the basis he holds it, relevant? The normal practice out there is for one person to have a lease on a flat, and the others to rent a room and pay money to the leaseholder, as out there only one person is allowed to be named on the lease. My husband has been the 'renter' in 2015/16 - bar initial 1-month in employer-sponsored hotel when his contract started - again this is normal practice when an overseas contract starts there. However, in your opinion, would you generally advise that someone in my husband's situation becomes a main leaseholder for 2016/17, and beyond to 2017/18? Again, I am not quite clear from the hmrc guidance whether being able to prove you have rented a room from a 'leaseholder' is sufficient proof of accommodation abroad to meet overseas automatic test criteria - even if that is normal practice abroad for the majority of overseas workers. Does he have to rent or lease his accommodation for any minimum period of time each e.g. 30 nights. This first year 2015/16 he has moved around whilst trying out different areas to live in, which I don't think matters as he is still UK-resident, but of course we need to understand whether this becomes more important for 2016/17, to meet the automatic overseas test.
3) Finally, I know that the rules on split-year treatment (for 2015/16) depend on showing you are non-UK resident for the following year (2016/17). But how can HMRC judge this when my husband submits his 2015/16 SAF, but has not yet completed his year working abroad in 2016/17 (and beyond)? I understand that HMRC automatically applies split-year treatment. Would it be normal just to declare on 2015/16 SAF that the 3rd automatic overseas test for 2016/17 will be met, or do you advise to send additional evidence e.g his work contract, actual hours worked, bought a car etc, with the SAF; or to provide further evidence only if/when hmrc requests it? Or would it be normal for HMRC to charge income tax for overseas income in 2015/16, and refund it after 2016/17? We just need to understand this, to help with cash-flow and plan for tax payment if necessary. I guess this is where my previous query about tax on acquired or remitted income came from, but I am relieved from your first response that this shouldn't happen for his period working abroad in 2015/16.'Tony', I would be grateful for your clarification on the above, am aware there are a number of additional questions. As mentioned, please let me know if there is a further fee.Thank you for your help so far.RegardsLynda