Do I Need To Submit a UK Tax Return If I'm Non-resident?
Paying tax is not optional - it’s the law.
UK expats relocating overseas living and working abroad still have an obligation to UK tax on worldwide income by default.
A domiciled citizen of the UK, or any other country, retains an obligation to tax on their worldwide income unless they are registered as a tax resident in a second jurisdiction with an appropriate double taxation treaty between the two countries.
Even if tax resident overseas expats will still be a liability to UK taxes on income arising in the UK.
Any income or gains that arise in the UK can be liable or taxed at source in the UK. This includes employment, property rental, capital gains on investment, crypto, business sales and property sales.
Moving
Under any double taxation treaty income or capital gains could be deemed to be movable or immovable.
If the income is deemed to be movable then it can be taxed in the Expats new country of tax residence.
This would include such things as dividends or bank interest and in jurisdictions like Cyprus the Expat will pay 0% on any dividend or interest income.
Different double taxation treaties allow for different concessions to tax in different locations. A source of movable income not taxed in the expats country of tax residence could still be deemed to be taxable in the UK subject to the tax laws and double taxation treaty in place.
Dualling
An expat must meet the rules for non-residence to be deemed to be non-resident for UK tax and gain concessions under the double taxation treaty.
An expat can be resident or non-resident to their home country. This is a black and white and grey area depending on circumstance and determined by the rules are in place. UK Expats relocating overseas retain liability to the UK tax for at least seven years on their worldwide income. If a sufficient break is not made with the UK in terms of family, home, income and interests then HMRC can assess you as dual tax resident.
Potentially this means Expats would pay tax in their country of tax residence but also be liable to any additional taxes on worldwide income and gains in the UK up to 45%
Essential
Time and purpose are essential for expat tax planning when relocating overseas and Living and Working Abroad. By assessing the criteria needed based upon an individuals circumstance and interests of property, home, business and income then guidance and a framework can be put in place for travel to and time spent visiting and working in the UK as a non resident expat.
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