Inbound Expats Coming to the UK

If you are a foreign national and you are coming to the UK to work on Contracts it is important to understand how the UK Taxation System will affect you if you.

Are you a highly skilled expat Contractor? Would you like to maximise your contract income and work towards a visa extension or visa transfer? If so Commonwealth Contractors can help!

To discuss your situation with an experienced advisor call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!

Key Issues for Inbound Expats

As an expat coming to the UK, assuming that you are not UK Domiciled, you will be taxed as a ‘non-Domiciled resident’.

You will still have to pay tax on your UK-source earnings, but will have greater freedom in terms of the treatment of non-UK earnings (for example overseas investment income).

During your first 7 years in the UK, you can elect to be taxed on a ‘remittance basis’ for overseas income. That is, you only pay tax on overseas income if you bring the money to the UK.

The disadvantage of choosing this option is that it means that you loose your UK ‘tax free allowance’. In 2012-13 that allowance is set at £8,105  for people earning under £100k pa, those earning over £100k have their tax free allowance withdrawn gradually so that at £116,210 they have no tax free allowance at all.

After 7 years, if you want to keep paying tax on a remittance basis, you must pay an annual charge of £30,000.

Once you have spent 17 years in the UK (or 17 of the prior 20 years), if you remain UK resident, your income will be taxed as if you were UK domiciled.

An expat coming to the UK will be deemed to be ‘Ordinarily Resident’ in the UK if at the time of arrival they expect to be in the UK for at least 3 years.

An expat coming to the UK will be deemed to be ‘Resident’ in the UK if either;

  • You are in the UK for 183 days or more in a the tax year, OR
  • You come to live in the UK permanently or to remain for three years or more (in this case you are resident from the date of arrival), OR
  • You are in the UK for an average of 91 days or more in a tax year averaged over the four preceding consecutive tax years