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bigduckontax, Accountant
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I am an EU citizen with domicile in India and living in

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Good day! I am an EU citizen with domicile in India and living in Singapore since 2012 as an expatriate and I just lost my job. I want to move to UK in September with my family. I will pay taxes on all income and bonuses before leaving Singapore and coming to UK. Singapore and UK have a DTA but Singapore does not tax severance payment as it is considered as "capital" and there is no capital gains tax in Singapore. Will I need to pay tax on my severance payment in UK ?

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

Did you move from the UK to Singapore in 2012?

Customer: replied 1 year ago.
No, I moved from India which is my domicile. I also regularly file my tax returns in India as a Non-Resident.

So you have never lived in the UK?

Customer: replied 1 year ago.
i did as a student for a year in 1995-96, but i want to move now to UK
Customer: replied 1 year ago.
the tax year in Singapore is 1st jan to 31 december and so i will pay my taxes here.. but if i arrive in UK after 6th october i will stay for <182 days in AY 2020-21. does that mean i can go down the split year route? Also my main question is still whether my severance pay which is not taxed in Singapore can be claimed as foreign income and taxed in UK as it was not taxed in Singapore?

To be on the safe side complete a Form P85 and send it to HMRC advising of your 1996 departure date. When you return the split year procedure will apply and any income earned in Singapore will be outside the scope of UK taxation.

Customer: replied 1 year ago.
but i was a student and not working in 1995-1996
Customer: replied 1 year ago.
from what i can see in gov.co.uk, it states that worldwide income and capital gains are taxable in both countries if i am a tax resident for the AY and I need to claim relief? Also if i choose remittance basis then the amount remitted will be taxed in UK?
Customer: replied 1 year ago.
does UK consider severance pay as “income generated from employment” and although featuring in the tax form in Singapore, may stake claim to that, given that no tax was paid?
Customer: replied 1 year ago.
sorry, not sure at this point if it will be featuring or NOT featuring on the tax form IR21 here as my HR department is not sure

If you do not submit a Form P85 then HMRC may not allow the split year procedure for your return. If you do you can forget about UK taxation of your Singapore income on your arrival here. on your return to these shores

Customer: replied 1 year ago.
ok. i will submit the P85. does it make a difference If i stay less or more than 183 days when it comes to the tax? or I am considered tax resident anyway due to the 91 days?
Customer: replied 1 year ago.
it says the P85 is for those who lived and worked in UK. I have not worked a single hour in the UK. always on a student visa where work is not allowed.
Customer: replied 1 year ago.
that too many many years ago
Customer: replied 1 year ago.
www.gov.uk/tax-foreign-income

I am only trying to make sure that when your reach the UK the split year principle is applied. You will then only be considered resident in the UK on the date of your arrival.

Customer: replied 1 year ago.
fair enough, lets assume I file P85 and get the split year principle, does that mean that the UK tax authority will give me relief for all earnings that was before i arrived on UK shores and will not tax me a single penny on any worldwide income or gains that I remit to the UK? Do you want a copy of the Singapore and UK double taxation treaty?
Customer: replied 1 year ago.
https://www.gov.uk/government/publications/calculating-foreign-tax-credit-relief-on-income-hs263-self-assessment-helpsheet/relief-for-foreign-tax-paid-2020-hs263
Customer: replied 1 year ago.
https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Quick_Links/Second%20Protocol%20amending%20Singapore-United%20Kingdom%20DTA%20(Ratified)(MLI)(1%20Apr%202019).pdf

No, I can look that up on the web if necessary.

Yes, the non resident status will protect you from that. Once you are resident in the UK again any earnings from overseas will be aggregated with your UK earnings and exposed to UK Income Tax (IT) etc. Any tax deducted by the Singapore authorities will, under the Double Taxation Treaty between the two countries which precludes the same income stream from being taxed in both jurisdictions. be allowed as a tax credit against your UK liability on the same income flow.

Customer: replied 1 year ago.
understood, but redundancy or severance pay is not taxable in Singapore, whereas in UK, any amount>30000 GBP is taxable right? so since i have not paid any tax on my severance payment, will I get full tax credit or partial?

Make sure you receive it before you land in the UK than it will all be tax free.

Customer: replied 1 year ago.
understood. I also read something about remittance basis, does this mean if i do not remit the severance pay to UK, i will not need to pay tax on it?
Customer: replied 1 year ago.
Also, do you advise that I arrive in UK after 6th October just to be on the safe side of 183 days or that doesnt matter?
Customer: replied 1 year ago.
I was reading the SRT but it is a bit confusing

Doesn't matter a hoot providing you have done the P85 and to be absolutely safe get your severance pay whilst you are still outside the UK.

Remittance basis can be expensive to set up and only applicable to Russian oligarchs.

Customer: replied 1 year ago.
I will need to submit the P85 before I arrive in UK?

Yes, it is available on the web and can be filed on line. Advise your original departure date from the UK.

Customer: replied 1 year ago.
Although I have acquired EU citizenship now, I had Indian citizenship until 5 years ago. So when I was a student in UK, it was always on a student visa ( no rights to work) from July 95 to July 96 studing marine engineering in scotland, then visited again in 1997, 1999, 2002 each time for a few months to answer marine exams.
Customer: replied 1 year ago.
Do I need to report the last stay in UK or all the dates in P85?

Just quote the day you left as a student.

Customer: replied 1 year ago.
understood. Thanks very much indeed for your patience and answers.

Delighted to have been of assistance.

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