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 resident

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 years 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.

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 reason to plan their tax affairs carefully.

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 issues affecting you.

UK tax law treats husband and wife as separate individuals so each will have their situation assessed and will be taxed accordingly. 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, if you are not UK tax resident you can still 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
   

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

Each 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. There are more details here.

Before you leave or return to the UK it could be important to consider the tax planning available to you.

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 UK rental income isn’t taxed twice.

The treaty 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.

Yes, if you are UK tax resident.

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 may be excluded from UK tax if you have left it outside the UK - but you will have to make a formal claim as part of your tax return.

If you are not UK tax resident then interest arising outside the UK will be outside the scope of UK tax and does not need to be disclosed.

If you are not UK domiciled you can consider 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 tax personal allowances and the 1annual capital gains tax allowance for the tax year of claim.

The remittance basis allows you to exclude from UK tax any income arising outside the UK and which has not been brought (“remitted”) to the UK. 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 at least £30,000 - the Remittance Basis Charge - for the remittance basis to apply.

If you are claiming the remittance basis as a non-domiciled individual you need to calculate what income or gains have been remitted to the UK.

The rules regarding what is treated as a remittance are complex. HM Revenue & Customs have published extensive guidance at https://www.gov.uk/government/publications/remittance-basis-hs264-self-assessment-helpsheet/remittance-basis-2020-hs264

A husband and wife from Salford, Manchester faced a £600,000 tax bill after a tribunal found they were still UK resident 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-resident, 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

From 2015 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 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. CGT only applies 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. The rate of CGT is either 18% or 28%, or a combination of the two, depending on the level of income and the annual exempt amount, currently £12,300 for 2020/21, is also available to non-residents.
   

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

4. There will be no relief for property businesses.
   

5. A new withholding tax is applied at the point of sale of the property. The non-resident vendor must disclose the gain and pay the CGT within 30 days of the sale. The disclosure must be made electronically using the HMRC online facility.