Foreign Residency

Foreign Residency

03/10/2018

In order to qualify as non-UK resident and income not being taxable in the UK, the HMRC residency criteria need to be met during a tax year.

If the contract starts/ends part way through a tax year, then ‘split-year treatment’ would be applied.

https://www.gov.uk/tax-foreign-income/residence [gov.uk]

 

If the employer is UK based then a ‘no tax’ NT UK tax code can be obtained via form P85.  Any duties performed in the UK may be treated as UK income.

https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85 [gov.uk]

 

Any investment income can be treated as ‘Disregarded income’ and you would not need to complete a UK self-assessment by virtue of the investment income.  

https://www.gov.uk/government/publications/non-residents-and-investment-income-hs300-self-assessment-helpsheet/hs300-non-residents-and-investment-income-2015 [gov.uk]

However if you wish to complete a self-assessment in order to utilise the UK tax free personal allowance, then all UK sourced income would need to be included in the self-assessment.

 

If there is any UK rental income you can apply for this not to be taxed in the UK.

https://www.gov.uk/government/publications/non-resident-landlord-application-to-have-uk-rental-income-without-deduction-of-uk-tax-individuals-nrl1 [gov.uk]

 

Please also be aware of mechanisms to avoid being taxed in both countries.

https://www.gov.uk/tax-foreign-income/taxed-twice [gov.uk]

 

The HMRC comprehensive guidance on Residency is RDR3.

https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt [gov.uk]