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bigduckontax
bigduckontax, Accountant
Category: Tax
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I’m moving abroad and have questions about non resodency

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I’m moving abroad and have questions about non resodency
Assistant: Have you talked to a tax professional about this?
Customer: No
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: Income tax and non-residency
Assistant: Which tax year is this for?
Customer: Current
Customer: replied 3 months ago.
I’ll be moving to Dubai and wanted to understand how to become non-resident as I’ll be getting paid from abroad. I also have a property which I’m planning to rent in the U.K. so I want to understand if am allowed my personal allowance? Thanks
Customer: replied 3 months ago.
Also what conditions I need to meet for non-residency. HMRC website a little complicated

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

When you leave the UK be sure to send a from P85 to your tax office. HMRC will then classify you as non resident for the tax year following your date of departure and, furthermore, split the leaving year into teo portions, one resident and the other non resident. Once so classified you can spend up to 90 days in the UK in any one tax year without breaching your non resident status. The form provides for the refund of tax overpaid on departure.

Your net rental income will still be taxable in the UK, but if you are a citizen of an EEA country you retain your personal allowance to offset this. You will have to continue to self assess unless HMRC tell you not to bother in future.

Customer: replied 3 months ago.
basically I need to spend less than 90 days in the U.K. within the current tax year to qualify as non-resident?

To retain your non resident status, yes.

What rotation will you be on?

Customer: replied 3 months ago.
Sorry, what do you mean by rotation?Regards

Like one month on one month off.

Customer: replied 3 months ago.
I’m moving out to Dubai long term. Will only be back to U.K. for meetings for a few days now and then.

No problem, you will be classified as non resident once you submit the P85, most important. The form is available on the web and can be filed online.

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Customer: replied 3 months ago.
You have been great! I might have a few questions later on. Thanks again :).

Delighted to have been of assistance.

Thank you for your support.

Customer: replied 2 months ago.
Hi

No problem.

Customer: replied 2 months ago.
I may be leaving the UK for 6 months to work in Dubai. Will I still have to pay tax on my income?

I thought you were going long term.

Customer: replied 2 months ago.
I was originally - just looking at options. As discussions have happened so I just needed to know my options so I don’t pay tax in UK

Well, if you are only away 6 months then your options are not there and you will be liable for UK Income Tax (IT) on your world wide earnings.

Customer: replied 2 months ago.
does it have to be a full year?

If you have a clear departure date and submit a P85 then the split year procedure will apply. Otherwise enen a very short period of UK residence wil trigger the liability.

Customer: replied 2 months ago.
my understanding is I can’t be in the U.K. for more than 90 days in the tax year. If I’m on holiday within the 90 days does that classify me as being out the country so I don’t use the full 90 dYsjust in case paper work gets delayed etc...

Once yuo serve a P85 then you can be in the UK for 90 days in any one tax year without infringing your non resident status. This can be extended in exceptional circumstances, eg illness, bereavement. The 90 days can also be averaged over 4 consecutive tax years.

Customer: replied 2 months ago.
the 90 days start after you submit the form and not before? I thought I had to leave within the first 90 days of the U.K. Tax Year.

Correct, you were misinformed. You can leave at any time.

Customer: replied 2 months ago.
Okay, so to confirm there is no need to leave in the first 90 days of the current tax year?

Correct, you can leave any time.

Customer: replied 2 months ago.
to confirm, I need to be out of the country as a minimum for a full year or full tax year to qualify non residency p85

Not quite, HMRC will apply the exemptions, if any, on leaving using the split year method. .

Customer: replied 2 months ago.
if I leave in July... how would the split work potentially?

For April - July you would be resident in the UK, thereafter classed as non-resident. The Form P85 provides for a refund of Income Tax (IT) overpaid on departure.

Customer: replied 2 months ago.
Thanks - you are making more sense than HMRC website :).So why can’t they do a split if it’s only 6 months? So jan to mar in U.K. and April to June abroad?

If you are only out of the country for 6 months you will almost certainly not be entitled to non resident status and be liable to Income Tax on your world wide income.

Customer: replied 2 months ago.
is there a minimum?

Usually over a year.

Customer: replied 2 months ago.
Just looked at the statutory residence test and it doesn’t seem I meet the automatic overseas test. Now I’m more confused!

Well, I did warn you! In my opinion your absence from the UK will not abate your liability to UK Income Tax.