Tax free earnings

[MGYoung]

Hi there,

I have been working in Dubai since 7th March 2005. I have only returned to the UK for 4 weeks during this period. I am due to return to the UK on a permanent basis on 23rd May 2006. I have not paid UK income tax on my salary during this period and have filled out all the necessary I.R. forms.

I start work in the UK on 29th May 2006.

Will I be taxed on my earnings since the start of the 2006 / 2007 tax year (i.e. the salary I was paid whilst working in Dubai) or will I only pay tax on earnings in the UK from 29th May 2006?

Thanks and all the best.

Martin.

[vipers]

I cant answer your question, but I am sure you will get lots of advise on here, my advise is to find yourself an accountant who knows all the rules etc on this. The very worse that can happen is you are ill advised you do not have to pay tax, then next year the I.R. slap a heavy tax bill on you.

I do not want to openly disclose the company I use, albeit they deal mainly with seamen, (no jokes now lads) they may be able to assist you, email me if you want their address.

[Eric Mc]

For 2005/06 it looks like you were non-UK resident for tax purposes so would not be liable to UK tax for any income earned abroad in that tax year. You will be a UK tax resident for 2006/07 so any earned income after 5 April 2006 (including income earned abroad) after that date MAY be subject to UK tax. However, there could be a Double Taxation Agreement between the UK and Dubai which might mitigate or remove any UK tax liability arising on income earned in Dubai after 5 April 2006.

You will probably also have to complete a 2006/07 Self Assessment tax return in order that you can notify the UK authorities of the income earned in Dubai after 5 April 2006. Self Assessment tax forms have Foreign Income Supplementary Pages specially for that purpose.