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Sam
Sam, Accountant
Category: International Tax
Satisfied Customers: 16308
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I need a little clarification on temporary non residency and

Customer Question

https://www.gov.uk/government/publications/temporary-non-residents-and-capital-gains-tax-hs278-self-assessment-helpsheet/hs278-temporary-non-residents-and-capital-gains-tax-2019Hello I need a little clarification on temporary non residency and my tax status as the hmrc guidelines are overwhelming.I have uk ties - lived in Uk for last 5 years, have a home in uk and family in uk. I will leaving the uk for one full tax year may be 2 and but not 5 full years and i will not come back for more than 15 days of the tax year - to satify the SRT test.I have been self employed in the uk and file tax returns for the last few years.I will move abroad (options are dubai or panama) and work on another project in the capicity of setting a company for the tax years that I live and work abroad, with the money coming into those new enitities set up. The monies earned by these new companies have brand new seperate relationships with new contractors overseas and are not tied to the work or contractors I have with in the UK.1)
For the the tax years i am abroad and the income from my new work/ revenue/ gains / investments I make and dispose of during my time abroad - am i correct in understanding that there are no UK taxes to be paid on the above monies earned?2)
I have read (maybe out of context) that i may be taxed on "some" income and "gains" upon my return.
So if i return after 2 years of working - and decide to bring this earned money (during the time i have been temporarily non resident ) back into the UK - is there a possiblity on me being taxed on this money?3) As my wife and kids will be in the UK during the whole period of time i am abroad (350 days not in the UK) earning money - i need to send my wife some funds - will this be taxed ?4) will I be deemed temporary non resident or treaty non resident ..is there big difference can I be both?
Submitted: 19 days ago.
Category: International Tax
Expert:  Virtual-mod replied 18 days ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Customer: replied 18 days ago.
Wow I just signed up, paid and there's zero response to my question. It's been almost 24 hours and you took my money.
What inefficiency.
Expert:  Sam replied 18 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 18 days ago.

Hi

That's because you posted into International tax and not UK tax so the moderators had to wait for a request to move it

Do you still require assistance or would you like a refund ?

Thanks

Sam

Customer: replied 17 days ago.
Assistance please yes. Thanks.
Expert:  Sam replied 16 days ago.

Hi

Based on what you advise

1)
For the the tax years i am abroad and the income from my new work/ revenue/ gains / investments I make and dispose of during my time abroad - am i correct in understanding that there are no UK taxes to be paid on the above monies earned?

There are if you charge them through your existing company but if you set up a company abroad then no

As an individuals if you spend more than 90 days in the Uk and are working abroad for less than a full tax year (so not just a normal years but a full tax year then you rmein liable to UK tax)

So when might you leave and I can expand on that

2)
I have read (maybe out of context) that i may be taxed on "some" income and "gains" upon my return.
So if i return after 2 years of working - and decide to bring this earned money (during the time i have been temporarily non resident ) back into the UK - is there a possibility on me being taxed on this money?

Income earned in the UK or earned whilst IN the UK remains liable to Uk tax - all assets sold (under the capital gain regime remain liable to UK tax)

3) As my wife and kids will be in the UK during the whole period of time i am abroad (350 days not in the UK) earning money - i need to send my wife some funds - will this be taxed ?

No as long as you meet the non residency ruling at answer one

4) will I be deemed temporary non resident or treaty non resident ..is there big difference can I be both?

Temp non resident no you cannot be both as not leaving to live and work abroad permanently

Thanks

Sam

Customer: replied 15 days ago.
Hi Sam,Thanks for the clarification, I am looking to leave in end of July. By the 1st of August.So not referring to any uk sourced income or gains on assets, any income from work from my new overseas company I make overseas is NOT subject to uk tax ...and I can bring that back without tax charges so long as I satisfy the non uk residence test, right?Do I have to notify hmrc about this money when I bring the money back and how is that done please. Thank you Sam.
Expert:  Sam replied 15 days ago.

Hi

Thanks for your response

Then as long as you complete a full tax year abroad (so from 01/08/2021 to beyond 06/04/2023 and during that time do not spend more than 90 days in the UK visiting none of which are for work purposes

Then all your income earned abroad will be exempt from UK tax unless paid through your UK company in which case then they are subject to UK tax although your salary will not be as will be tax exempt

But if you are employed and are paid overseas for working overseas then as long as you meet the rules advised you will be UK exempt on this foreign income even if you send it home (to the UK) to support your family or any you bring back after the job has finished as all earned whilst not resident so remains tax free

You just need then to pay tax in the country in which this income arises

Thanks

Sam

Customer: replied 15 days ago.
Ok excellent . Last question is that if I contract services as self empolyed overseas when I'm overseas during that tax year and spend less than 90 days as per abovementioned to fit the temp non residence , there will also be no taxes in the UK?So hmrc cannot challenge that I only moved to Dubai for that temporary period , to avoid paying uk taxes.
All contract work is with separate new contractors, nothing to do with previous contractors I had before.
Thanks for your help. Much appreciated.
Expert:  Sam replied 15 days ago.

Hi

Ive answered this already

"There are if you charge them through your existing company but if you set up a company abroad then no

As an individuals if you spend more than 90 days in the Uk and are working abroad for less than a full tax year (so not just a normal years but a full tax year then you rmein liable to UK tax)

So when might you leave and I can expand on that"

but you have to stay out of the Uk working and living beyond 06/04/2023 and not visit more than 90 days for the tax year and also not carry out any work in the UK

Thanks

Sam

Customer: replied 15 days ago.
Sorry I forgot to close off the question...above?So hmrc cannot challenge that I only moved to Dubai for that temporary period , to avoid paying uk taxes is that right?
Expert:  Sam replied 15 days ago.

Ive already answered your question scroll up to the original chats we had

Of course they can challenge this its up to you to keep evidence of dates and where you are or you will remain liable to UK tax if its only a short visit and you cannot prove its meet all the requirements to remain tax free

Thanks