UK Residency - Tax on Foreign Income
Discussion
I was wondering where people got advice on what counts as foreign income in the eyes of HMRC as I've no idea where to start on this.
As a family, we're considering moving abroad within the next 12 months, I do freelance/contract software development through a UK Ltd co. Looking at the guidance from HMRC, if you work abroad full time and spend fewer than 91 days in the UK you're non-resident. But does operating a UK company from overseas actually count as working abroad?
We'd also want to keep our UK property for use on the 91 days we'd be back in the UK. But if we pass the automatic overseas tests, do any of the UK tests still apply?
Thanks in advance
As a family, we're considering moving abroad within the next 12 months, I do freelance/contract software development through a UK Ltd co. Looking at the guidance from HMRC, if you work abroad full time and spend fewer than 91 days in the UK you're non-resident. But does operating a UK company from overseas actually count as working abroad?
We'd also want to keep our UK property for use on the 91 days we'd be back in the UK. But if we pass the automatic overseas tests, do any of the UK tests still apply?
Thanks in advance
If you're keeping your house in the UK and its available for you to stay in ie not let out iirc you haven't broken sufficient ties to the UK to become non resident.
Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
This is a good summary of the residency rules.
If operating via a UK limited company you would certainly still be liable to Corporation Tax. Not sure about dividends and Income Tax but would be interested in knowing the answer myself.
If operating via a UK limited company you would certainly still be liable to Corporation Tax. Not sure about dividends and Income Tax but would be interested in knowing the answer myself.
ecs said:
We'd also want to keep our UK property for use on the 91 days we'd be back in the UK. But if we pass the automatic overseas tests, do any of the UK tests still apply?
It's very complicated & yet clear and simple at the same time. There are lots of rules, but they are quite well articulated. Advice is useful as there are a few gotchas, but you can get most of the way there on your own by reading the available literature.The automatic tests trump the further decisions, they are kind of tie breaker questions.
The link above is useful, as is the KPMG flowchart - https://assets.kpmg/content/dam/kpmg/pdf/2016/01/s...
Split year treatment is a further complication depending on when you plan to move.
In simple terms - working abroad is almost literally that, it's where the work is physically carried out.
dingg said:
If you're keeping your house in the UK and its available for you to stay in ie not let out iirc you haven't broken sufficient ties to the UK to become non resident.
Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
^^^^Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
This, having your home which you can use when in the country will be tricky for you (are you planning to rent it for the remainder of the year?) Also worth digging into the rules for working for a UK ltd company (there are rules around paying NI still if you're working for a UK company somewhere else. As others have said, find a good accountant who has previous experience of navigating this type of setup. Also, if you're planning to be in the UK up to 90 days per tax year, how many days are you planning to work (this feeds into the residency tests too.
UK aside, consider the tax rules of where you are going to be living when not in the UK, many countries will be keen to know about this too.
mark seeker said:
dingg said:
If you're keeping your house in the UK and its available for you to stay in ie not let out iirc you haven't broken sufficient ties to the UK to become non resident.
Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
^^^^Have a look at the uk gov page statutory residence test guidance, it can be a tricky one to work out and a good professional accountant with experience in these areas will provide you with the best advice....
This, having your home which you can use when in the country will be tricky for you (are you planning to rent it for the remainder of the year?) Also worth digging into the rules for working for a UK ltd company (there are rules around paying NI still if you're working for a UK company somewhere else. As others have said, find a good accountant who has previous experience of navigating this type of setup. Also, if you're planning to be in the UK up to 90 days per tax year, how many days are you planning to work (this feeds into the residency tests too.
UK aside, consider the tax rules of where you are going to be living when not in the UK, many countries will be keen to know about this too.
We're interested in doing autumn/winter/spring in the UAE and summer/Christmas in the UK. Tax rules there are pretty basic and there's a number of residency/visa options depending on how we structure things.
I've found this guy who I'm going to schedule a call with soon: https://offshorecitizen.net
Edited by ecs on Saturday 23 July 17:52
Carbon Sasquatch said:
It's very complicated & yet clear and simple at the same time. There are lots of rules, but they are quite well articulated. Advice is useful as there are a few gotchas, but you can get most of the way there on your own by reading the available literature.
The automatic tests trump the further decisions, they are kind of tie breaker questions.
The link above is useful, as is the KPMG flowchart - https://assets.kpmg/content/dam/kpmg/pdf/2016/01/s...
Split year treatment is a further complication depending on when you plan to move.
In simple terms - working abroad is almost literally that, it's where the work is physically carried out.
That is an excellent flow chart from KPMG and shows up some of the garbage many speak bout being res or non-res.The automatic tests trump the further decisions, they are kind of tie breaker questions.
The link above is useful, as is the KPMG flowchart - https://assets.kpmg/content/dam/kpmg/pdf/2016/01/s...
Split year treatment is a further complication depending on when you plan to move.
In simple terms - working abroad is almost literally that, it's where the work is physically carried out.
Bottom line is if you work full time overseas, its really very simple & not complicated
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