Q3. In what circumstances would I become non-resident?
A3. Normally if you leave the UK to work abroad full-time, you will become not resident and not ordinarily resident in the UK if:
your absence and employment from the UK covers a complete tax year (that is 6 April to 5 April)
you spend less than 183 days in the UK during the tax year
your visits to the UK do not average 91 days or more a tax year over a maximum of four years
From 6 April 2008, days when you are in the UK at the end of the day, that is midnight, are normally counted as days spent in the UK.
It also includes of your days of arrival and departure, at what ever time of day. That can be important to remember if you're close to the limit.
p.s. Last year I flew to Germany via London. The London flight arrived at LHR terminal 3, and the Germany flight left from Terminal 5. Despite being booked as one itinerary our baggage was not checked though, but the two legs were treated as point to point. Plus we had to clear immigration (which could be a 'taxable event' depending on how many days you have previously been in-country) and pay £15 for a flipping taxi. Thanks SIA!
p.s. Last year I flew to Germany via London. The London flight arrived at LHR terminal 3, and the Germany flight left from Terminal 5. Despite being booked as one itinerary our baggage was not checked though, but the two legs were treated as point to point. Plus we had to clear immigration (which could be a 'taxable event' depending on how many days you have previously been in-country) and pay £15 for a flipping taxi. Thanks SIA!
I can picture the scene; it sounds dreadful. Was it a cold, grey and rainy day too? Always seems to be when I go there. I try to avoid transiting through London if at all possible. Anywhere is better than LHR in my experience - Zurich, Frankfurt, Paris, etc. have all proved much easier. The worst London transit I've done involved catching a bus (or coach as we used to call them) from Heathrow to Gatwick in order to catch a flight to Spain. I vowed never to do that again.
On the subject of 'clocking in & out' of Blighty, I've noticed that my passport is always scanned by the UK Border Authority (or whatever they're called this week) when entering the country, but not always scanned when I leave. My 'UK days' are always well under the maximum allowed, so I'm not really worried about it, just curious as to whether (and how) our movements are actually logged. Perhaps the authorities also get data from the airlines? _________________ Yes I have no Masters
I can picture the scene; it sounds dreadful. Was it a cold, grey and rainy day too? Always seems to be when I go there. I try to avoid transiting through London if at all possible. Anywhere is better than LHR in my experience - Zurich, Frankfurt, Paris, etc. have all proved much easier. The worst London transit I've done involved catching a bus (or coach as we used to call them) from Heathrow to Gatwick in order to catch a flight to Spain. I vowed never to do that again.
Probably. But at 6am it is never going to be fun. Then the realisation that you'll never make the transfer via the HRW shuttle, so you leap into a taxi... can we pay on a card, no? of crap, lets hope we have some Sterling! Only to join another check-in line to then fly retracing part of the geographical journey already made. Yep, not fun!
p.s. This wasn't our choice of routing, rather it was inflicted on us, being the cheapest option. But really, I'd not expect such bull from SIA.
LHR - LGW by coach transfer?.... oh God that sounds like a recipe for hell!
On the subject of 'clocking in & out' of Blighty, I've noticed that my passport is always scanned by the UK Border Authority (or whatever they're called this week) when entering the country, but not always scanned when I leave. My 'UK days' are always well under the maximum allowed, so I'm not really worried about it, just curious as to whether (and how) our movements are actually logged. Perhaps the authorities also get data from the airlines?
Good question, I don't know, but I might look into it! Imagine running right on your 90 day a year threshold, and then because rather than use normal airside transit, you have to unexpectedly clear immigration, go streetside, and get a connecting flight from another terminal you're suddenly legally UK tax resident. All a bit bonkers.
The UK does not "track" people moving into and out of the country due to a lack of a central database like other European countries.
When you pass through immigration, all they check is that you have the right to pass and that you are not on any watch lists.
With regards taxation - the base rule is 182 days, however proposals may change this. For example, if you have dependants in the UK, i.e. children at a boarding school - futures changes may add to YOUR tax days resident.
A simple rule is, if you cut ties (including property) you will not face much risk. If you maintain ties you will accrue tax liabilities on UK source income and world income if you visit/stay for too long.
Can they track it? No. The UK has very poor capabilities compared to other EU countries. They rely on "nosey neighbours" and random checks.
...in any single year, or average of 90 days per year over max four year period
I.e.
Example #1
90 days per year for 4 years = ok
Example #2
Year 1 - 90 days = ok so far
year 2 - 182 days = ok so far
year 3 - zero days = ok so far
year 4 - 89 days = not ok, you breached the average with 361 days/4 years = 90.25days per year.
I have just been asked by my company if I want to work in Singapore for a few years, this would be 1 or 2 years.
I have a house in the UK that I plan to keep - will probably rent it out.
from my understanding of the above if I am only out of the country for 2 years (and visiting the UK infrequently) I will end up paying tax is this correct?
I have just been asked by my company if I want to work in Singapore for a few years, this would be 1 or 2 years.
I have a house in the UK that I plan to keep - will probably rent it out.
from my understanding of the above if I am only out of the country for 2 years (and visiting the UK infrequently) I will end up paying tax is this correct?
You'll pay UK income tax until you leave the UK
SG income tax after you arrive
Even in SG you'll have to file with HMRC for your UK rental and pay UK taxes on it.
The earlier posts in the topic are regarding determination of UK residency for tax purposes and not directly linked with the circumstances that you describe ...
I have just been asked by my company if I want to work in Singapore for a few years, this would be 1 or 2 years.
I have a house in the UK that I plan to keep - will probably rent it out.
from my understanding of the above if I am only out of the country for 2 years (and visiting the UK infrequently) I will end up paying tax is this correct?
You'll pay UK income tax until you leave the UK
SG income tax after you arrive
Even in SG you'll have to file with HMRC for your UK rental and pay UK taxes on it.
The earlier posts in the topic are regarding determination of UK residency for tax purposes and not directly linked with the circumstances that you describe ...
Thanks, I don't think my post was clear (trying to get my head around all the tax implications).
The question is really will I be liable for UK tax on my earnings whilst in SG? As yet I don't know if I will be paid in the UK or paid directly into a SG bank account.
Thanks, I don't think my post was clear (trying to get my head around all the tax implications).
The question is really will I be liable for UK tax on my earnings whilst in SG? As yet I don't know if I will be paid in the UK or paid directly into a SG bank account.
Usually I'd say if you move to SG, get paid by a locally registered company, you'd not pay UK tax on that. But, maybe being paid out of the UK could be a complicating issue. Don't know, that's too complex for my knowledge.
Ultimately it will all be in the HMRC tax guide somewhere!
[Or you could call HMRC and ask them. Despite their reputation I find that they are generally much more pleasant and helpful that one expects.]
The question is really will I be liable for UK tax on my earnings whilst in SG? As yet I don't know if I will be paid in the UK or paid directly into a SG bank account.
You won't know until you find out. SG and UK inflict taxes based on entirely opposite criteria:
UK taxes you on any earning in the UK, irrespective of where you do the work (i.e. work in SG, get paid in UK, pay UK tax!)
SG taxes you based on where you work, irrespective of where you get paid. e.g. work in singapore, get paid in UK, still liable for SG tax. And UK tax!
However, there is a limited double-taxation treaty, so ultimately you only pay one lot of tax, but you may be in a position of double taxation until you can get the necessary letters from the Comptroller in SG to show to the IRS in the UK.
In essence, its better for you if you get paid in Singapore only. IN any case, you will still have to do self-assessment for your property income (and you can't file online if you have overseas income without using 3rd party software, the HMRC website cannot accomodate it!).
When you leave UK, it is worth trying to get yourself declared non-resident for tax purposes. I simply wrote to them and told them I was leaving UK for the forseeable future, had only one asset remaining (my house) that was rented out and that I was jumping in with both feet. Your circumstances may be different.
I have found that if you write to HMRC, they are much better at understanding the issues these days, but don't expect the same level of response over the phone. A good international tax specialist would be worth his weight in gold at this point.
The Fry Group is a tax/financial company specialising in UK & SG tax/financial affairs, they would be able to help.
IN any case, you will still have to do self-assessment for your property income (and you can't file online if you have overseas income without using 3rd party software, the HMRC website cannot accomodate it!).
Seems like HMRC have a motive to stop expats filing online. It is specifically the Non-Resident disclaimer (NRD) that they won't give you access to directly through the HMRC portal.
So as CG says for the sake of answering 3-4 questions on one form, out of a total of maybe 100+ you have to buy 3rd party software.
I use TaxCalc. It is about £25 a year, and it interfaces with the HMRC site allowing online filing. It's a fab thing. You can complete it as if completing the HMRC forms, or flick a switch to what they cal 'Simple steps' mode, i.e. all the questions written and explained in a human language. Use it for a couple of years and it pulls in prior years data for analysis (if you want), and has a What-if function so you can test scenarios inside your actual draft return.
Even if I was not compelled to have 3rd party software, I still think I'd pay for this product. It is so much simpler than going directly via HMRC to file. Plus I can offset the cost against income as well of course...
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