What happens to my tax position when I leave the UK?
Posted on 18th July 2021
When an individual who has been resident in the UK leaves the UK their residence position for the tax year will be determined based on several different considerations which is outside the scope of this article.
Assuming that the individual is non-resident, they will be liable to UK tax on any UK source income that cannot be ‘disregarded’.
Disregarded income is savings income from banks and building societies, UK dividends (not in the case of split year treatment), income from unit trusts and NSIs, certain social security benefits such as state pensions and widows’ pension and taxable income from purchased life annuities.
Income from UK trade, UK workdays in employment and rental income will be relevant for UK tax purposes for a non-resident taxpayer.
In addition, capital gains tax arising from the sale of residential property in the UK will be relevant for UK tax and reporting and payment must be made to HMRC within 30 days of the sale.
Individuals who are non-resident can be eligible for the UK personal allowance although not everyone will be able to claim this.
The country in which the individual is resident should be considered and if the UK has a tax treaty with this country, it may be that tax relief can be claimed in the UK or that country to avoid certain sources of income being taxed twice.
In order to prepare a tax return as a non-resident the foreign pages of the tax return will need to be completed and it is key to ensure that a record is kept of any return days to the UK. A day is counted if an individual is present in the UK at midnight.
The Coronavirus pandemic has not changed the way in which HMRC determine whether an individual is resident in the UK however, up to 60 days can be claimed in the UK as “exceptional circumstances” which are disregarded when looking to determine how many days have been spent in the UK for residence purposes. If an individual could not leave the UK when intended due to Covid that individual will not be required to pay UK tax on employment income that was earned between the dates that the individual intended to leave and when they actually left provided that tax was paid on that income in the individual’s home country.
Questions or queries?
Please do let us know if you have any questions or if you need any further help understanding the rules. – please call us on 01932 564098 or message us here.
Information correct at time of publication
This article was produced in July 2021 – please always check with Fuller Spurling that information is current, up to date and applicable to your situation.
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