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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a client who was born in the uk and lived and work in

Customer Question

I have a client who was born in the uk and lived and work in the u.k. ( d.o.b. 1986)
Since February 2011 she has worked for a Dutch Company (Trafiguria) living and working in Switzerland and recently moved to work for the same company in Singapore. She is paid either in Switzerland or Singapore.

She spends less than 4 weeks in the u.k. visiting family

She very recently has purchased a house to rent out in the u,k, ( October 2012)

She wants to buy another house in the u.k. to rent out and wants to remitt £50k back to the u.k. as a deposit on the new house

Will this 50k be taxible?
Submitted: 5 years ago.
Category: Tax
Expert:  TonyTax replied 5 years ago.

Currently, so long as your client spends less than 183 days in the UK in any one tax year and less than 91 days on average in the UK per tax year as measured over a rolling period of a maximum of four years she will not have to pay UK tax on her foreign earnings whether she repatriates any of it or not. Take a look at pages 47 and 48 of HMRC6 to see how to calculate the average number of days spent in the UK per tax year.

The government plans to introduce a statutory UK tax residency test with effect from 6 April 2013 which will make it easier to assess an individual's residency status for 2013/14 et seq. Take a look here, here and here for more information. The document in the third link is the most up to date and represents how the new rules will almost certainly look from 6 April 2013. You need to make sure she is covered by paragraph 11 to be sure of her non-UK residency status. Otherwise, you need to look at paragraph 13 onwards.

Repatriating her earnings should make no difference but the number of days she spends in the UK will be matched against a list of UK connections to assess her UK residency status so the lower she keeps her days in the UK, the better. The tests from paragraph 13 will apply unless she can satisfy paragraph 11 as mentioned above.

I hope this helps but let me know if you have any further questions.