If you earn income in the UK from things like a pension, rent, interest from savings, dividends or wages, you will likely have to file tax returns with HMRC even after you’ve left the UK. So if you’re thinking about leaving the UK, temporarily or permanently, you need to make sure your tax submissions are kept up to date.
Are you a UK resident or not?
Before you leave the UK, find out if you’re a resident or not. Your status as a tax resident affects whether or not you need to pay tax on foreign income.
The number of days you spend in the UK within a tax year (6 April to 5 April the following year) will determine what residency status you hold. Many people who leave the UK are unaware of what their residency status is, so I strongly advise you find out as soon as possible.
You are considered a resident in the UK if:
- During the previous tax year you’ve spent 183 days or more in the UK
- The only home you’ve ever owned, rented or lived in was in the UK (you must have lived in the home for at least 91 days in total and spent at least 30 days there within the last tax year)
You will be a considered a non-resident in the UK if:
- You’ve spent less than 16 days in the UK within the last tax year
- You have a full-time job abroad and you’ve spent less than 91 days in the UK and no more than 30 of those days were spent for work-related purposes
From the above it is clear that many UK expats are surprised to learn they are still classified as tax residents in the UK. It is thus imperative that you get hold of a tax expert to check what your status is. Only then will you know if you need to file UK tax returns from your new home.
What you need to do before you leave the UK
Before you leave the UK you need to notify HM Revenue and Customs (HMRC). You will need to tell them whether you are leaving the UK permanently or if you’ll be away for less than a full tax year.
Getting in touch with HMRC can be a time-consuming task, so you may choose to get a professional to help you notify the tax authority when you leave the UK. If you’ve left the UK without notifying HMRC, things get even more complicated.
If you’re a UK non-resident, living outside the UK, you won’t be able to use HMRC’s online service to submit your tax return. In this situation, you have to file your returns either by post, using certified software, or with the help of a trustworthy accountant.
If you’ve left the UK you should ideally wait until the end of the UK tax year (5 April) before you submit any relevant income to HMRC. In this way you will minimise the amount of income and capital gains tax you have to pay in the UK.
How to find out if you have to file a tax return
If you’re a non-resident you may be required to pay a tax return if you:
- Are living abroad and are a director of a company
- Receive any profits from a business partnership in the UK
- Are self-employed and receive income from the UK
- Live abroad but most of your work is done in the UK
- Receive any rental income from the UK
- Make any capital gains from the sale or liquidation of assets in the UK
Check if there’s an applicable double taxation agreement
If there’s a double taxation agreement between your current resident country and the UK, you can avoid being taxed twice. Depending on the agreement between the two countries, you can apply for:
- A partial or full refund before you’ve been taxed
- A partial or full refund after you’ve been taxed
To find out if you’re living in a country that has a double taxation agreement with the UK, speak to a UK tax expert.
Contact us on +44 (0) 20 7759 7553 if you need help filing a tax return as a non-resident, or send an email to firstname.lastname@example.org and one of our consultants will get back to you shortly.
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