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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4962
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Good afternoon. I have worked overseas for 35 years and plan

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Good afternoon. I have worked overseas for 35 years and plan on retiring next year. I will receive a lump sum from my profit sharing fund. If I retire before the end of the tax year beginning of April but do not receive the lump sum till the new tax year will it be counted as 2014 income or 2015 income? I am asking because I need to plan my actual retirement date since it will take 2 months for them to process the profit sharing and they cannot do it till I officially retire. Thank you.
Hello, I'm Keith and happy to help you with your question.
I am of the opinion that it would be taxed in the year in which it vests. However, if this is before you return to the UK it will be outside the scope of UK taxation. On your return to the UK the tax year of your return will be split into two portions, one non resident and the other resident, so you will appreciate the importance of the dates of receipt and also your return. If the sum is significant I would recommend staying overseas until the cash is received.
If it comes in after you are an UK resident please note that under Double Taxation Treaties between the UK and well over a hundred countries and indeed some US States individually to boot then any tax borne in the country of origin will be a tax credit against any UK tax liability on the same income stream. Your question is silent upon where you work, so I cannot determine if there is a Treaty in force.
I do hope I have been able to point you in the right direction with my guidance.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your excellent support.