UK Expat - Tax Problems when move back to UK

[martincymru]

scenario:

UK man is tax resident in Singapore for 5 years. Employee of Company in Sg (HQ is in Sq) now wish to send him to UK to perform work starting May 1st 2013 ending Jan 10th 2014. He will go back to Sg Jan 11th 2014.

He has asked for salary uplift of 30% for 8 months to cover UK income tax (50%uk -20%sg).

Let’s assume Company has agreed.

However what if the UK man has offshore investments. He will now have to pay tax at 50% of the interest. The Company refuses to reimburse the loss.

What to do? Anybody got direct experience of this?

[JR8]

Will revert and prognosticate tomorrow when I'm less spam-frittered. I'm kinda ok on this kinda thing.




p.s. Nudge me hard if I stay dozing

[martincymru]

Will revert and prognosticate tomorrow when I'm less spam-frittered. I'm kinda ok on this kinda thing.




p.s. Nudge me hard if I stay dozing

nudge, nudge

[JR8]

scenario:

UK man is tax resident in Singapore for 5 years. Employee of Company in Sg (HQ is in Sq) now wish to send him to UK to perform work starting May 1st 2013 ending Jan 10th 2014. He will go back to Sg Jan 11th 2014.

He has asked for salary uplift of 30% for 8 months to cover UK income tax (50%uk -20%sg).

Let’s assume Company has agreed.

However what if the UK man has offshore investments. He will now have to pay tax at 50% of the interest. The Company refuses to reimburse the loss.

What to do? Anybody got direct experience of this?

It is an interesting question. I think it hinges on whether you become 'tax resident'. Where will you be paid? Where are your investments? ... my immediate thought is that physically moving from outside the UK, into the UK, will not cause currently tax-free investments, to be subject to tax.

p.s. As I expect you know, and despite how it feels, there is no 50% tax rate in the UK.

[offshoreoildude]

My view is that your offshore investments are you own matter, not your employers and that if they'd been set up with a proper arms length relationship, then this would not be a problem.

[martincymru]

I will be tax resident 'cos living/working/resident in UK for 8 months.
Will be paid from Sg ( I think ). But does it matter ?
Need to fill in a tax return in UK; pain in the arse etc.

Yes, my offshore accounts are my concern not the Employer. But the unintended consequence may result in personal commercial suicide if I accept the temporary relocation. Hence this forum posting to explore other option (s).

One option is that I inform Employer will go to UK for 91 days max in this 365 day window thus avoiding UK residence status.
( My friend tells me it is 183 days? I have read the UK tax website but the wording is unclear to me; appreciate answer on this simple point).

Btw for info:
" Income tax
Interest on savings is subject to income tax
•Taxable savings income above £34,370 and up to £150,000 is taxed at 40%.
Anything above £150,000 is taxed at 50%. "

[martincymru]

Sorry JR8 your previous posting answered this......

" ...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.

[JR8]

I'm very glad you found that, as I have only the vaguest recollection of writing it!

Re-reading it though that is how it works.