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bigduckontax, Accountant
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I would like to identify/discuss my uk tax residence status

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Hello,I would like to identify/discuss my uk tax residence status for the current tax year, under these conditions:Currently:- I am currently in the UK, since the start of the tax year.
- I am staying at my parents house. I do not own UK property.
- Single with no children or ex-spouse
- I play online poker and earn an approx income from this <= 15-20k GBP/year (this is non-taxable/winnings from gambling)Moving to Thailand:- I wish to move to Thailand within the near future (2 weeks to 1 month).
- I have a history of living there approximately 4 of the last 6 years, on and off. The last years have been mostly in the UK.
- I will stay there until the end of the tax year, (ideally I would like to visit my family at christmas if no change in tax status)
- In Thailand, I will trade cryptocurrencies (eg. bitcoin) to gain income, I will also continue to play online poker but at a reduced rate.
- In Thailand, I will rent a condo/apartment for 6months lease at a time.
- Ideally I would like to withdraw cryptocurrency profits to my UK bank account during this period.I wish to know if I will be classed as a UK tax resident, and therefore if tax will be liable on cryptocurrency profits made abroad.I understand that the statutory residence test is used to determine UK tax residence status.Upon analysing the statuatory residence test, I beleive i would be classed non-resident based on my low number of days in UK (30-40) and my number of ties (Accomodation tie and 90-day tie).I am concerned that "Second automatic UK test" might apply to me if I spend more than 30 days at my parents home? I am confused at the definition of "UK home" as I do not own my parents property legally, but have stayed there since December last year. Prior to this, I stayed with my uncle at his house for 7-8 months and Thaialnd 2 months prior.If you could give any clarity as to my tax residence status, this would be much appreciated.Please, if you need any more information, do not heistate to ask.Thankyou
Customer: replied 5 months ago.
to clarify: I will trade cryptocurrencies (eg. bitcoin) daily in Thailand

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question. By the way, I have a Thai wife.

You will not be an UK resident for the 18/19 tax year.

When you leave the UK for Trailand be sure to complete a Form P85 and send it to HMRC. That Department will classify you as non resident for the tax year following your dat of departure and, furthermore, split the leaving year into teo portions, one resident and the other non resident. Once so classified you may spend up to 90 days on the UK in any one tax year without breaching your non resident status.

I do hope that you have fond my reply of assistance.

Customer: replied 5 months ago.
Thank you for your quick response, and nice to hear you have connections to Thailand aswell.Just some more things to mention:- In Thailand, I will be working in partnership with a friend to trade cryptocurrencies full-time:- I would receive a percentage of the profits gained, not a regular salary or other employee benefits.
- Does this classify as employment and what documentation would I need to provide to HMRC if requested at a later date?
- Are regular trading profits treated as Capital Gains/Income?
- In relation to Statuatory Residence Test (SRT) now applied, what rules would qualify my tax residence status? Would i qualify for the "Third automatic overseas test"?
- Also the definition of "UK home" in the SRT:- I am currently staying at my parents home and will probably stay there over 30 days until I leave Thailand - Would this not qualify me as UK resident under "Second automatic UK test"?
- I have the option to stay at my uncles home again to reduce days between both UK homes to < 30 days each home, if this makes sense.
- Currently, I have always filed a Self Assesment whilst in UK and Thailand: For the P85 form it states:Do not fill in this form if:
• you've completed, or are required to complete a Self Assessment tax return for the tax year that you leaveCan I still send this in?Any further detail and information is much appreciated to offer some clarity on the process:Kind RegardsQuestions in relation to this document:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/547118/160803_RDR3_August2016_v2_0final_078500.pdf

This is a typical example of HMRC stupidity. How can you self assess before the end of the tax year? The P85 provides for the refund of overpaid tax on departure and if you do not send one in that Department will never classify you as non resident.

Customer: replied 5 months ago.
I have technical/programming background and value well defined logical situations, but my brain is starting to hurt the more I read tax law and try to form a concrete answer based on all the rules provided.If you could give any more insight into how HMRC would approach determining my status based on my scenario and SRT, it would be much appreciated.

HMRC would be stymied by your submission of a P85 when you leave the UK for Thailand.

Customer: replied 5 months ago.
Hello again, I would like to say I am not officially working for a company or as employee whilst in Thailand. will HMRC still see this as valid work whilst abroad?I reckon I will be in the UK at least 40 days until I am ready to leave for Thailand. Will that length of time disqualify me in any way for non-residency?Thanks again

It would be nothing to do with HMRC were you classified as non resident which you would be post submission of a Form P85. Once classified as non resident you can spend up to 90 days in the UK in any one tax year without breaching you non resident status. 40 days in the UK would be no problem before you depart. If you left in June for example your pro rata no of permitted days in the UK would be 75. You would be classified as non resident for the 19/20 tax year and the 18/19 would be a split year, one portion resident, the other non resident.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 5 months ago.
Sorry, last point and I will leave a rating:Foreign income earned and remitted to UK during the non-resident part of tax year is not taxable, is that correct?

Correct, lots of ex pats do this on a regular basis. Don't forget the P85 though.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 5 months ago.
ok thanks for your help I will leave feeback now, i will submit the P85 on departure, are they any things to say/not say on the form for my situation?

Thank you for your support.

No, just advise your tax office of your departure,

Thank you for your support,

Customer: replied 5 months ago.
Hi there again,just like to ask if i where to stay in Thailand for 1 or 2 years and return to UK as a resident, am I not liable to pay tax on foreign income when returning to UK as i was <= 5 years out of UK = 'temporarily non-resident'?
Customer: replied 5 months ago.
eg. i remitted 80k gbp to the UK whilst in Thailand for 1 full tax year, trading cryptocurrencies. I came back to UK to reside, would i receive tax bill on the 80k in this tax year? since i did not fulfill 6 years abroad = 'temporarily non-resident'?

No not at all providing you remember the P85. On receipt of the P85 HMRC will classify you as non resident as I originally explained. On return you merely advise HMRC of your return by letter and the split year procedure is immediately applies again, but in reverse.

Customer: replied 5 months ago.
ok thankyou, the reason i'm asking is i am expecting a decent windfall in trading (well over my normal average yearly income that might put me in the highest tax bracket) and I am sure HMRC would be curious as to where the money came from and if taxable.I am just trying to understand if they would see me 'dodging tax' by moving to Thailand and potentially back again ( I would prefer to stay their longer term but may have to return for my parents care etc).

Providing the position is closed whilst you are in Thailand then there will be no HMRC involvement. That Department only comes into play when you are resident in the UK. Under the P85 procedure you can return to the UK for 90 days in any one tax year without breaching your non resident status. In the event of family illness this can be extended.

Customer: replied 5 months ago.
It would not be flagged to them by the UK bank receiving funds? I do not wish to hold much of the funds in Thailand, only to support living costs.I also tried to fill in P85 online but would not let me enter a future UK departure date, can only be after I have left. So i should fill this in shortly after leaving?

Yes, you would.

Banks receive thousands of overseas remittances each day so I would not be concerned about that.

Customer: replied 5 months ago.
Ok, thankyou for your help once again!It has been very stressful trying to read tax law around this, I have also read I should not stay more than 30 days in a UK home (parents) without a overseas home or I will be automatically UK resident under SRT rules (automatic UK test 2). My situation should override this rule by my self-employment/trading in Thailand?As i am concerned i should leave straight away to remain under the 30 days rule, which is putting me under a bit of pressure as one can imagine!

HMRC always express the law as they would like it to be not what it actually is! Use the P85 and you will be all right. Don't use it and they will trample all over you. In Thailand you cannot, as a farang, own your own home anyway except maybe a condominium or through a Thai limited company.

Customer: replied 5 months ago.
very true, and thank you again - "Sabai Sabai"

Delighted to have been of assistance.

Customer: replied 5 months ago.
Hi there,I see some firms offering a "specialist residency advise" service where they would go into detail of the SRT for that individual and advise how many days can spend in UK etc, pitfalls etc.Do you offer such a service? If so what would be the approx cost? I have appreciated your insight and experience in this matter

Sorry, I can give general advice, but as we know from the news these days the left hand side of the Home Office does not know what the right hand side is doing and very often they are at cross purposes! If you use the P85 then the 90 day rule kicks in. In theory these 90 days can be averaged out over 4 consecutive tax years, but the general consensus of experts on Just Answer is never to exceed the magic 90 days.