At Harris Stewart we are experts in UK residence issues and offer specialist advice to our clients on residency issues, how to avoid dual residency problems and guidance to help you understand the implications of your residency status.
With many years of experience, our services include advising on how to improve and maintain your residency status to ensure you have the most efficient tax position.
Tax considerations for expatriates
With potentially lower taxes on your income and a range of attractive lifestyle choices when you move abroad, it’s not uncommon for UK residents to live outside of the UK. For expatriates or ‘expats’, it is vitally important to understand how a move from the UK will impact both your UK and global tax obligations.
While not being a UK resident can result in a reduction of income and capital gains tax paid in the UK, it isn’t as straightforward as it may first appear. The introduction of the Statutory Residence Test in April 2013, means that determining your residency status has become more complex than it’s ever been, and the terminology can be difficult to fully understand.
Correctly reporting UK resident status at the earliest point is vital to expatriation, and became more complicated with the introduction of the Statutory Residence Test. It is also important to consider that a non resident may still have lingering UK income from property, pensions or occasional UK workdays which mean there will still be a filing requirement in the UK. Unfortunately, many people are unaware of this obligation as it’s commonly believed not to be the case.
You may have heard of the online tax return completion form offered by the HMRC. This is currently not applicable to non-resident pages which forces non-residents using HMRC software, to file their tax returns by paper in time for the earlier deadline of 31st October. As Harris Stewart use third party software, our team are able to file your tax return electronically which extends the filing deadline to 31 January.
Potential compliance issues
There are many compliance issues to consider and deal with in a timely manner to avoid penalties. Our experienced team have the expertise to offer the best tax advice to all expatriates and non-UK domiciled residents.
Source employment and rental income
Forms such as P85 and NRL1 (non-resident landlord scheme) must be completed accurately and filed with HMRC. In instances where there is failure to comply, it can result in tax being deducted from UK source employment and rental income, even when tax doesn’t need to be paid.
In instances of having dual residence status where you have foreign income or earnings, you may face double taxation. While many believe that income doesn’t need to be reported to another country if it is being taxed in the other, this is rarely the case. To navigate these complexities, you require a skilled knowledge of both dual residence and double taxation treaties to ensure the correct claim for relief and to avoid double taxation. Our team have the expertise and experience required and have helped many clients who have faced this issue.
Capital Gains Tax
The legislation for non residents selling UK property changed significantly in April 2015 and it is now necessary for you to inform HMRC, within 30 days, when you dispose of a residential property in the UK as a non- resident. Late reporting may result in a late filing penalty and interest on tax due. We can promptly file the necessary Non resident Returns, provide tax estimates and consider which reliefs and elections are applicable to your situation to ensure you don’t pay more than required.
Contact us today
We’re proud to be part of the Association of Independent Expatriate Tax Practitioners (AIETP), an independent group of tax advisers specialising in expatriate tax consulting. At the forefront of this niche, the AIETP are represented on the joint expat forum with HMRC, where the association discuss new legislations and the effects on both expatriates and non-UK domiciled individuals. Outside of companies such as PwC, Ernst & Young, KPMG and Deloitte, we offer one of the largest and most experienced groups of expat advisors.
Expatriate taxes and UK residence issues can be a complicated area and it’s important to have access to specialists who can advise you on the right course of action. At Harris Stewart, we will act in your best interests and keep you informed at every stage.