UK tax.

[michaela74]

If your living and working abroad, obviously tax free, and your family are planning to stay in the U.K. for a year do you have to pay U.K. tax? If so, what percentage?
Please feel free to pm me if you have any idea.

[anson harris]

You don't have to pay any UK tax as long as you, as the expat, don't spend any more than a given amount of time in the UK. The number of days is determined by the level of connection you have back to the UK. I would think you are allowed 46-90 days at a guess.
http://http://www.expertsforexpats.com/expat-tax/expat-tax-advice/

[harry the cod]

anson harris's statement is not strictly true about the number of days abroad. My recommendation is to seek professional advice. PM me and I can give you the details of someone.

You may be liable for UK tax regardless of the days you spend there. If your spouse resides there, if the house is your main residence and if your children are schooled there, all of these factors contribute to you being classed as domiciled in the UK. It's complicated and there are a list of multiple questions you'd need to answer to decide whether tax is payable on income earned abroad, regardless of where you, the earner, lives.

Harry

[ZFT]

Very, very sound advise. I just hope he/she takes note.

[Avenger]

I concur, it's a minefield and easy to fall into traps. Initially I engaged a "tax professional" but their fee was more than the tax i was out to pay! in the end a quick phone call to HMRC and the guys could not have been more helpful..furthermore it becomes a matter of record you are making an attempt to do the right thing. My waterloo was keeping my UK house empty for the kids so it became " available " to me, once I rented it out under an AST and sent the proof to HMRC the problem disappeared as I met the other residency tests in terms of family ties and days in UK. Initially clobbered for 55% as where I was working did not have a DTA with the UK. Call the HMRC for free and discuss..

[speedbirdhopeful1]

You may be liable for UK tax regardless of the days you spend there. If your spouse resides there, if the house is your main residence and if your children are schooled there, all of these factors contribute to you being classed as domiciled in the UK. It's complicated and there are a list of multiple questions you'd need to answer to decide whether tax is payable on income earned abroad, regardless of where you, the earner, lives.

Harry

Domicile is nothing to do with income tax. You'll need to go to great lengths to break your UK domicile and for most of us it's not an issue.
The HMRC made it fairly simple in the last few years. The statutory residency test looks at the number of ties with the UK and reduces the days accordingly. The 'accessible accommodation' of your home and your family there are significant and will restrict your days significantly. Also, doing a UK layover counts as 1 day as well.
Call around a few small accountants back home and ask them if they have experience in this and get some advice. They can fill in your tax return for you too. Please fact check everything myself and others have said and never take financial advice from a pilot and you'll be fine!

[UNC]

A Link:-
https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt

[The Crew]

Korean employ a whole bunch of Brits who commute too and from Korea. Most pay zero uk tax despite kids/wifes/mortgages permanently in uk. Thin ice perhaps.
And if you go down that route don't join a gym , its the top way the taxman a catch a you .

[gatbusdriver]

Statutory residence test guidance notes are relatively straight forward. As has been said number of ties is key, the way I read it you could have up to 120 days in the UK, although I am nowhere near that! As Harry suggested get professional advice or call HMRC, as long as you call from abroad on the overseas number you don't have to hold you get straight through to an adviser. If you are looking at renting property if it is in you and your partners name you should both fill out a NRL1 form (non resident landlord).

[Avenger]

Slightly off topic but spending your money in uk is an issue as last year the mortgage rules. Changed and the main earner should be a uk resident with the salary paid in GBP. This presents a problem if your wage slips are in another currency. The proof of funds for deposit is also tightened under the money laundering rules. It seems we are gradually getting stuffed by the council for mortgage lenders and the banks in the uk and the opportunities to furnish a reasonable lifestyle are all but removed. Of course if you remain in the same house and simply pay off your debts it's no big issue. As posted HMRC are very helpful

[Plane and simple]

Slightly off topic but spending your money in uk is an issue as last year the mortgage rules. Changed and the main earner should be a uk resident with the salary paid in GBP. This presents a problem if your wage slips are in another currency. The proof of funds for deposit is also tightened under the money laundering rules. It seems we are gradually getting stuffed by the council for mortgage lenders and the banks in the uk and the opportunities to furnish a reasonable lifestyle are all but removed. Of course if you remain in the same house and simply pay off your debts it's no big issue. As posted HMRC are very helpful

The government told mortgage lenders to take changes in exchange rates into account for all mortgage lending. This significantly increases red tape, and reduces the amount they will lend against foreign earnings. As it is such s niche market, most lenders have voluntarily stopped lending against foreign income.

There are only a few that still offer mortgages at normall rates to "U.K. Residents" who are paid in AED, EUR or US$ etc.

As for the money laundering rules, it's usually sufficient to show the money has been in a U.K. Account for a couple of months.

[luvly jubbly]

As for the money laundering rules, it's usually sufficient to show the money has been in a U.K. Account for a couple of months.

I think you have to show a build up of savings over time, or be prepared to prove where the money came from.

[harry the cod]

speedbirdhopeful1

Being domiciled does become a factor in tax implications.

Being domiciled in a Country is different to being resident but they are intrinsically linked when it comes to whether tax is payable on earnings. The definition of domicile will depend on which country defines it, but in basic generic terms this would be a legal residence in which a person has a fixed dwelling with the intention of making it his/her permanent home. It can also factor in residence and intent to remain. Domicile of origin can be influenced by country of birth, Father's birth country and a few other factors. Country of residence is different altogether.

In 2013, the UK government implemented new rules to determine whether income tax can be applied to an individual's earnings. They apply the SRT (Statutory Residence Tests) which consist of 3 tests being applied in the following order:

1) Automatic Overseas Test
2) Automatic UK Test
3) Sufficient Ties Test

Each of these tests have a number of further specific tests. This will determine your residence status and how you will be taxed. This is where the domicile part now comes into play. If your wife is living full time in UK, the children are going to school in the UK and you have a house of permanent dwelling for you or your family, you will have 'ties' with the UK. So, whilst strictly true that income tax is not directly related to country of domicile, indirectly it is and can affect you tax liability.

To compound the confusion, it's quite possible to pay UK tax on income derived above your personal tax allowance, despite being classed non resident. For example, you could do numerous 24 hour layovers to the UK in a year as well as say 60 days holiday there. Providing you have no UK sourced income that puts you above the tax free allowance, you will have no liability, providing of course all the other tests are passed! However, if you have just one rental property that earns more than the personal tax allowance, you will be liable for any other income earned in UK, regardless of time spent there. So, just one 24 hr turnaround flight to LHR in the whole year will have a tax implication because a portion of your salary is being paid to you whilst you're laying over in the UK. It's not a lot, but it is payable under the current rules. However, 50, 60 or even 70 days spent there on vacation have no effect as you're not 'earning'.

You say they simplified the rules, I'd beg to differ. They have made the determination less subjective by incorporating a more complicated checklist and process to follow.

What we do agree on is that any expat with an interest in the UK MUST seek an expert's advice before assuming they're not subject to income tax

Harry

[nitro rig driver]

Further to Harry's post
From my accountant ,

"From December 2016 a new double taxation treaty (between the UK and UAE) has been issued stating that your UAE income will be taxable in the UAE only as long as you are NOT in the UK for more than 183 days and your employer is not UK resident."

So your layovers will not be liable to UK tax (assuming the 183 days limit) however any other UK sourced income still comes under the "SRT" test particularly if your close to or over the personal tax free limits.

The new rules makes no difference to "operating crew" and traveling as a pax- like there used to be.


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/584114/UK-UAE-DTC_GOV.UK-in-force.pdf

[harry the cod]

nitro rig driver

Which, ironically, would be beneficial to us rather than the current ludicrous situation of being charged almost £90 every time I do a UK trip while my mate gets to keep all of his £48 allowance!

I didn't read the link but thought that it was only in principle at this stage and yet to be fully implemented. Anyway, thanks for the update.

Harry

[nitro rig driver]

Harry

Read article 14-i think it explains better in the link.

Maybe there is such a thing as "simplifying" after all ..:D


Be interesting to see how they view your "allowances" though.