22 June 2022
Pre-Planning
When planning to come to the UK, attention should be given to the possible tax consequences of doing so. Careful planning could allow you to avoid exposure to UK tax and advice is available upon request.
There are numerous issues for you to consider such as:
- The frequency of your visits – which can lead you to overstep the number of days permitted to you as a non-UK resident.
- Employment activities performed in the UK – even if for a foreign employer – as this generates UK sourced income.
Various other reasons may include short term project work, long term study or even international secondments to the UK for 2 years. Each case is almost unique and needs to be studied separately.
If UK tax residence is established, tax will be assessable in the UK on worldwide income, unless those newly arriving in the UK of non-UK domicile can use the remittance basis of taxation. In this instance, the tax will be assessed only on the foreign income that is remitted to the UK.
Some pre-planning points to consider:
- Can money be transferred to the UK in advance of moving to the UK?
- Ringfencing savings overseas prior to the move. If managed properly such funds can possibly be transferred without paying UK tax.
- Overseas workday relief may be possible and with careful planning this can help to reduce the tax exposure for those of a non-UK domicile.
Beware of temporary non-residence anti-avoidance rules if returning to the UK after an insufficient amount of time away. Tax may be payable in the year of return on income and gains realised in the preceding years.
Review the relevant double taxation treaty between the two countries. Employers should reconsider amending employment contracts where applicable to allow for the appropriate taxation rights. Couples should consider the tax efficiencies that might be available to them if one remains resident overseas while the other is in the UK.
Whatever the change of circumstances, planning is always recommended and we are here to support you in the process.