UK Expat Tax If you are living or working overseas, then there are certain tax concerns you must consider. Change of residence from the UK to overseas will most definitely affect you. In addition to your changed UK tax status, you will need to consider the laws in your overseas residency.
the Bus Employees Friendly Society, we are offering you advice about UK expat tax. For information, call us in Reigate on 01737 226 060. Statutory Residence Test
To determine whether an individual is a resident or non-resident, there is a
Statutory Residence Test. There are three types of taxpayer: arrivers, leavers and those working full-time outside of the UK.
If you are an individual who has not been a resident in the United Kingdom for any of the previous three tax years, you are an arriver. Additionally, if you are resident in any one or more of the previous 3 years, you are a leaver.
Please note: if your position is unclear, you should seek professional advice. Capital Gains
Non-residents are not subject to Capital Gains Tax, but there are exceptions. For example, you will need to pay if you are a non-resident trading in the UK through an agency or branch. Furthermore, some anti-avoidance legislation considers Capital Gains as income.
If you are a non-resident who has been a citizen of another country for less than 5 whole tax years, you are assessed on gains earned during your absence.
One rule that does apply to both expats and non-residents is when it comes to selling a UK property. No matter what, you will owe Capital Gains Tax on any profit made.
If you are leaving the United Kingdom, you must fill in a
P85 for HMRC. However, it should not be filled out by those filing a UK Tax Return. A Tax Return will need to be filed for the year of departure.
UK tax liability does not necessarily stop on the day of your departure. Neither does your obligation to continue filing Tax Returns. Even if you do become a non-resident, your income will continue to be taxable.
If you have left the UK but still own property there, you are liable for Income Tax under a Non-Resident Landlords scheme. It is possible to register as a non-resident landlord with HMRC.
Personal Tax Allowance
If you are classed as a tax resident within the UK or receive an income in the UK, you will often receive a personal allowance. Your personal allowance in the 2020/21 year is £12,500. You will be taxed on any earnings above your allowance.
If you are a resident in more than one country (dual residence), there is often a double tax treaty. This is to ensure you are not paying twice.
Get in Touch
For more details and expat advice, please contact the Bus Employees Friendly Society. Call us in Reigate on
01737 226 060. Alternatively, enquire through our contact form and we will be in touch.