In it's simplest form, the UK tax law says that income tax is chargeable -


    - on the worldwide income of anyone who is UK tax resident

    - on the UK income of any non residents


So it is essential to determine your tax residence status, remembering that each tax year is taken separately. You may be UK tax resident for one year because of an extended visit but non resident for the tax year either side.


There are separate rules for capital gains and for inheritance tax. If you have a liability to UK tax you must complete a Self Assessment tax return.

What income is taxable in the UK?

It is possible to be tax resident in two countries at the same time. It is also possible to not be tax resident anywhere, although this is less common. When you are tax resident in two countries a measure of relief is usually available against double taxation.


The UK has negotiated Double Taxation Treaties with a large number of countries and these are being updated all the time. Each treaty is different so if you believe you are taxed in the UK and elsewhere, contact us for more info and we can advise you of the relief available.

The tax year in the UK runs from April 6th to April 5th.

Of all those falling within the UK tax net, expatriates probably have the greatest scope for planning their affairs to pay the least amount of tax.


When your tax affairs straddle two countries, things can get rather complicated so it is important to plan your affairs in advance, where possible. In certain circumstances, becoming non resident may allow the sale of assets without a charge to capital gains tax, although this is only available to longer term expats.


Tax planning may involve the timing of your departure from, or arrival in the UK, timing of sale of assets or the use of dual contracts for employment. Contact us for more info if you would like advice on the opportunities available to you.

UK tax law treats husband and wife as separate individuals so each will have their situation assessed and will be taxed accordingly.


Unlike the USA, the UK has no joint filing of tax returns for husband and wife.

You cannot claim personal allowances if you claim the remittance basis as a non domicile. Otherwise, you can claim UK personal allowances if you are -

  1. a British or Commonwealth citizen

  2. an EC citizen

  3. an employee, or former employee, of the British Crown

  4. a UK missionary employee

  5. a civil servant of a territory under the protection of the British Crown

  6. a resident of the Isle of Man or the Channel Islands If

  7. a national or resident of a country with which the UK has a Double Taxation Treaty which allows such a claim

Normally, a tax year is taken as a whole when determining your tax residence status. However, a year of arrival or departure can be split into periods of residence and non-residence in certain circumstances.


See the new rules which apply from April 2013, here.


Before you return to the UK you should consider the tax planning available to you - see above.

Eire is not part of the UK but if you leave the UK to take up an employment in Eire, an employer based in the Republic of Ireland counts as a UK employer. But working in the Republic of Ireland counts as working overseas.

When you are non resident -

  1. If you are employed outside the UK your employment earnings are not taxable in the UK (but they may be taxable in another country).

  2. If your employer is based in the UK but you work overseas, you may remain within PAYE but an ‘NT’ tax code will mean you pay no tax in the UK.

  3. Investment income such as bank interest and share dividends is only taxable in the UK if it arises here.

  4. You will remain within the Capital Gains Tax net for five years after leaving the UK in respect of assets held at the time you left the UK.

If you work partly in and partly out of the UK the situation is complex. Contact us for advice.

Sometimes.

The UK has an extensive network of treaties with other countries. Treaties differ from country to country but the basic idea is to ensure that the same income is not taxed twice.

An example of this might be a resident of “Country A” who has UK rental income. She would most likely be taxable in Country A on worldwide income but also taxable in the UK on the rental income as it is a UK source income. The UK / Country A treaty would ensure the income isn’t taxed in both countries, either by relief or by allowing a credit for the tax paid in the other territory.

The treaties will eliminate double taxation either by exempting the income in one of the countries or, if the income remains taxable in both countries, by allowing a credit for the tax paid in the other country.

The requirement to claim treaty relief will depend on personal circumstances and in the UK the claim is made as part of the self assessment tax return. If you believe you need to make a claim, Contact us for advice.

If you are UK tax resident - yes.

UK tax law says that if you are UK tax resident then you are taxable in the UK on your worldwide income and gains. So your worldwide income - including all income arising outside the UK - must be disclosed on your UK tax return.

This does not mean it will necessarily all be taxable in the UK as you may be able to claim treaty relief if the income has already been taxed elsewhere.

If you are not UK domiciled then some non-UK income can be excluded from UK tax if you have left it outside the UK - but you will have to make a formal claim for exemption as part of your tax return.

From 6 April 2008, anyone not UK domiciled (and prior to April 6, 2013 those who are UK domiciled but not UK ordinarily resident) have to make a claim for the remittance basis of taxation to apply. The claim has to be made on a year-by-year basis and where a claim is made, the individual loses his personal allowance and annual capital gains tax exemption for the tax year of claim.

An automatic claim for the remittance basis applies where the aggregate unremitted foreign income and gains for a tax year are less than £2,000.

Where an individual makes a claim for the remittance basis and has been resident in the UK for at least seven out of the nine previous tax years, they must pay a tax charge of up to £50,000.

Generally, this charge has meant that you must have foreign income of at least £75,000 before it is worthwhile claiming the remittance basis. The equivalent figure for chargeable gains is about £165,000.

The £50,000 charge is eligible for double tax relief in the USA and elsewhere.

From April 6, 2011 HMRC introduced new penalties for those who hide assets and income abroad. They are referring to this as 'offshore tax evasion' and it could relate to something as simple as a bank account held in Jersey.

The maximum penalty for offshore tax evasion is 200% of the tax due.

It is not a problem to hold offshore bank accounts or other assets - but if you are UK tax resident you must disclose any income or gains on your tax return. If you don't properly disclose the income or gains then these penalties will apply.

The penalties are :

  1. failure to notify – where you fail to tell HMRC that you have a source of income or a capital gain that may be taxable.

  2. inaccuracy on a return – where your self assessment return is incorrect

  3. failure to file a return on time – where you send your self assessment return late

Rather strangely, the severity of the penalties is linked to the place where your assets are held. This seems to be a punishment for having links with certain countries

So for the time being the rate of penalty is linked to how readily the foreign territory shares information with the UK. The harder it is for HMRC to get information the higher the penalty.

Do you need help with filing a tax return?


We can complete and file a return for you with all tax calculations calculations and can quote a fixed fee in advance.


Contact us for details

If you are claiming the remittance basis as a non-domiciled individual - or you are not ordinarily resident before April 6, 2013 - you need to calculate what income or gains have been remitted to the UK.

The rules regarding what is treated as a remittance of income are complex. HM Revenue & Customs have published extensive guidance at http://www.hmrc.gov.uk/cnr/res-dom-tax-amends.htm

Expat FAQs

Will I be taxed in two countries?

What is the UK tax year?

Will I have any tax planning opportunities?

How is my spouse treated?

Can I claim personal allowances against my UK income?

How will I be treated, for tax purposes, when I leave or return to the UK?

How will I be treated if I work in the Irish Republic?

How does my non resident status affect my UK tax?

Do I need to claim under a Double Taxation Treaty?

Do I have to disclose offshore bank interest?

If I am not UK domiciled, what can I claim?

What is a remittance?

Are there issues with tax penalties?

For urgent assistance 

Email us and we will get back to youmailto:kieran@cambridgetax.co.uk?subject=Panic%20Button%20:%20Urgent%20help%20needed

"Travel is glamourous only in retrospect"


Paul Theroux

Non-Residents and Tax Records

Non-UK residents who visit the UK must keep careful records of the dates of their visits to this country, as demonstrated by two recent cases*.  The outcome of the cases was largely influenced by the quality of record keeping made by the individuals concerned. Taken together, just over £6m of tax was in dispute.  [Rumbelow & Anor v. Revenue & Customs 2013 UK FTT 637, Glyn v. Revenue & Customs 2013, UK FTT 645].


There were similarities between these cases, but very different results for the taxpayer. The Tribunal took notice of the meticulous records of movements kept by Mr Glyn – and found in his favour - while they noted the absence of records and inconsistencies in the case of Mr and Mrs Rumbelow  - and the Rumbelows lost. 

“This case demonstrates that millions of pounds can be won or lost due to the quality of an individual’s record keeping,” warned Richard Mannion, national tax director at Smith & Williamson, the accountancy and investment management group.

“These cases focused on tax years before the new statutory residence test was introduced, but the need for detailed records remains paramount.

Many people spend a large portion of the year abroad, but keep ties with their family in the UK. Mannion advises: “In such cases, it is important that people keep scrupulous records of not just the date, but the time of their arrival, into and out of the UK.  They should also note the reason for their visit, where they stay and where time is spent outside the UK.  The extent of record keeping required will depend on individual circumstances, but a full list appears in section 7 of HMRC’s guidance note RDR3.”

* The two cases focused on residence status (with the rules applying before the statutory residence test in Finance Act 2013) which were at First-tier Tribunal. They concerned:

  1. 1.Mr & Mrs Rumbelow (TC03022) (involving disputed tax totalling approximately £0.59m between 2001/02 and 2004/05);

  2. 2.James Glyn (TC03029) (involving disputed tax of £5.5m for the 2005/06 tax year).


Source : Smith Williamson

A Recent tax Case

A couple from Salford face a £600,000 tax bill after a tribunal found they were still UK residents despite moving to Portugal more than 10 years ago.

Stephen and Pauline Rumbelow left England after Mrs Rumbelow suffered a breakdown. The couple had hoped to spend their retirement in a villa they built for themselves in Silves, southern Portugal.

But a long-running dispute with HMRC [Rumbelow v commissioners for HMRC, TC03022] meant that they faced a tax bill of almost £600,000 (in income tax and capital gains tax) after a judge ruled that the UK farmhouse they owned remained "essentially a family home".

Stephen Rumbelow, who made his fortune in building and property development, was “deeply suspicious” of HMRC, the tribunal heard.

After briefly living in an unfurnished flat in Belgium the couple built themselves a mansion in Portugal. But their plans for a relaxing retirement were challenged when HMRC refused to accept that they were resident abroad in the tax years 2001-2005. HMRC charged the couple with retrospective tax demands.

The Rumbelows lived at Yew Tree Farm, Crowton, before moving abroad. In the tribunal they argued that they had intended to move permanently abroad when they boarded a Europe-bound train in April 2001.

They said they had only since returned to England as visitors to see friends and family – and never for more than the 90 days a year, the threshold then applied by HMRC for overseas residence.

When dismissing the couple's appeal, Judge Cannan noted Mr Rumbelow's "deep suspicion" of the tax authority and found that their departure had not marked "a distinct break" with the UK.

Although the couple protested that their intention to make their permanent home abroad "could not have been more distinct or clear", the judge said that Yew Tree Farm had "remained, essentially, a family home". The couple made frequent trips home.

Although there had been some "loosening" of their social and family bonds with Northwich it was not "substantial" enough to make them non-UK residents, the tribunal ruled.

The £600,000 figure is based on disputed income tax and capital gains tax from the years 2001 to 2005 for both Mr and Mrs Rumbelow.

Source : AccountingWeb

The new rules for expats seek to encompass all capital gains made in respect of UK residential property.

The main aim of the new rules - which apply from April 2015 - is to ensure that non-residents are subject to CGT in a comparable way to UK residents.

The main provisions of the new rules include :

  1. BulletCGT will only apply to capital gains arising after April 2015.  An election for re-basing from that date is available so that only the increase over the April 2015 value will be taxed.

  2. BulletThe rate of CGT will be either 18% or 28%, depending on the level of income and the annual exempt amount, currently £11,100, is also be available to non-residents.

  3. BulletPrincipal private residence relief is available to non-residents only in limited circumstances for periods after April 2015.

  4. BulletThere will be no relief for property businesses.

  5. BulletA new withholding tax is applied at the point of sale of the property. The non-resident vendor will have the option to pay the withholding tax or the actual tax due, within 30 days of the sale.

The withholding tax element is something new, and many non-residents will be forced to submit UK tax returns for the first time in order to pay the lower amount of the actual CGT due, compared to the withholding tax rate.

New Capital Gains Tax Rules for Expats

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