If you are a UK National (and are UK Domiciled) it is important to understand how the UK Taxation System will affect you if you are considering leaving the UK / working abroad.
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 Points for Outbound Expats
There are a number of key points Outbound Expats should consider;
- You will keep your UK domicile (domicile of origin) indefinitely, and may even keep it if you acquire another domicile (a domicile of choice). While you are abroad, the main tax significance for you of your UK domicile may be that it makes your estate subject to UK inheritance tax on your death. Changing your domicile as part of UK inheritance tax planning is outside the scope of this article.
- You will be tax resident in the UK in any year when you spend 183 or more days in the UK during the tax year
- Initially when you leave the UK you may remain Resident in the UK for tax purposes. You only cease to be ‘Resident’ if you EITHER take up full time work abroad, OR make a definite break from the UK. This is because, among other things, when you first leave, it will, probably be some years before once you have spent an average of under 91 days per year in the UK over the preceding 4 years.
- For as long as you are UK Resident for tax purposes, you must pay UK tax on your worldwide income, although you may be able to get ‘double tax treaty relief’: i.e. a credit for tax paid to a foreign government on non-UK earnings.
- If you cease to be Resident or Ordinarily Resident then you will not usually have to pay UK tax on your non-UK income or capital gains. However, for as long as you remain UK Domiciled, if you die your estate will be subject to UK Inheritance Tax