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Foreign Nationals coming to the UK to work and/or live

Tax if you come to live in the UK

You have to pay tax on your UK income and capital gains if you come to live in the UK. Income includes wages, benefits, your pension and investment income. This is regardless of which country your employer is based in and also the country where your income is paid to (i.e. the location of the relevant bank account).

Tax residence status

If you come to live in the UK you will likely become UK tax resident in accordance with the UK Statutory Residence Test.

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

Domicile status

A person resident but not domiciled in the UK receives special tax treatment in respect of income and gains arising outside the UK. There are many factors that affect your domicile, but it is generally considered to be the country which is your permanent lifetime home i.e. where you were born and where you have family, social, domestic and financial ties.

Remittance basis for UK resident non-domiciled individuals

As a UK resident non-domiciled individual, you have the option of being taxed on either the “arising basis” or the “remittance basis”. The “arising basis” is when you will be liable for UK tax on your worldwide income and gains when it arises. The “remittance basis” is when you choose to be taxed only on your UK income and gains and ONLY the foreign income and gains you bring back/remit to the UK.

Overseas Workday Relief

A UK resident non-domiciled individual may be eligible to claim Overseas Workday Relief. If you qualify for the relief you:

  • pay UK tax on UK employment income based on the number of days you’ve worked here
  • don’t pay tax on income from days you work abroad (as long as you don’t bring it into the UK)

If you’re also taxed abroad

You may be taxed twice on the same income or gains unless the country you’ve come from has a double-taxation agreement with the UK.

ExpatMatters can provide comprehensive advice, planning and assistance in the following areas:

  • Determining your UK tax residence status including ‘split year treatment’ when applicable
  • Planning and advice using the Statutory Residence Test
  • Working out which country you’re domiciled in
  • Advising on all aspects of the remittance basis rules
  • Claiming Overseas Workday Relief and advising on qualification criteria
  • Understanding any double taxation issues and utilising the double-taxation agreements (tax treaties) to minimise taxes and avoid double tax situations
  • Preparing UK self assessment tax returns for both UK and non-UK residents and electronic filling with HMRC
  • Providing UK arrival tax briefings
  • Completing all necessary UK arrival tax documentation
  • Advising on the taxation of termination payments particularly where there has been a period of international employment
  • Advising on international Social Security issues
  • Handling HMRC notices / audits

The above is not an exhaustive list of services offered, therefore please do contact us for a free initial consultation to discuss your specific requirements. There are no hidden costs in our fee quotes and we can work on a fixed fee basis where appropriate.

Additional information regarding residence, domicile and the remittance basis can be found in HMRC publication RDR1 https://www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability

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