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Old 30th Aug 2020, 15:19
  #867 (permalink)  
lockedout
 
Join Date: Sep 2014
Location: UK
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My (layman) input, for what it's worth is . . .

I don't think Provident Fund payments are seen as earned income, so I would have thought would not be taxed as such.

As for where you are when you receive any income payment, I do not believe it is relevant. More relevant is the date any payment is made, as it dictates in which tax year it will be assessed. Any income from EK this tax year will be assessed as foreign income in tax year 2020-21.

The main question is whether you will be deemed to be UK resident or non-resident for tax year 2020-21. If you are non-resident, then no tax will be due on EK income. If you are resident, then you will need to declare EK income as foreign income. But, as I noted above, Provident Fund payments may not be seen as income. There will also be the issue of separating true income from any severance payments, if applicable.

I found the rules around UK residency (for tax purposes) far from straightforward, certainly it wasn't a case of just spending more than 183 days in (or out) of the UK in a given tax year. One's ties (property, family, etc.) and the situation in previous years are also considered, so I would advise taking the HMRC Statutory Residence Test (SRT) for not only this year, but previous years too.

There is the option of split year assessment, but that isn't as simple as one would expect it to be.

Professional advice has been rightly suggested but, as long as you can cope with the frustration of links that take you round in circles, or to irrelevant pages (such as residency rules regarding immigration), the HMRC website is pretty comprehensive and clear. Online tax returns are due by the end of January 2021, so you have plenty of time (though paper returns are due by the end of October 2020). I don't think there are many decisions you can make now to influence events other than, of course, to keep clear of the UK until after 6 October!
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