British Expat Tax Advice
If you are planning to live or work overseas, there are certain British tax issues you must consider. Your change of residency from the UK to overseas will impact your tax status. If you don’t understand your tax position on your income and assets in another country, you may be making unnecessary payments.
At the SCS Financial Management, this month’s blog is offering British expat tax advice. For more information, call us on 01737 373707.
Call our team on 01737 373707
Statutory Residence Rules
The statutory residence rules determine your residency. Ensuring your residency status is correct is important, otherwise you may end up paying more than you need to. To find out whether you are a UK resident or non-resident, there is the Statutory Residence Test.
This helps you work out:
- How any UK investment income is treated
- The implications of selling UK assets
- Inheritance Tax & Capital Gains Tax rules
Personal Allowance
If you are classed as a UK tax resident, or receive an income from the UK, you will often receive a tax-free personal allowance. The 2020/21 tax-free personal allowance is £12,570. You will be taxed on anything you earn above that.
Non-residents living in a country that the UK has a double tax treaty with often restricts the UK’s rights to taxation. This ensures you do not pay more than once.
Capital Gains Tax
Since April 2015, both British expats and non-residents who are selling a property in Britain now owe capital gains tax on any profit made. This previously did not apply to non-residents.
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Informing HMRC
If you decide to leave the UK, you must fill out a P85 form to inform HRMC. However, you only need to fill this out if you do not file a UK tax return. You will need to file a UK tax return for the year of your departure.
It is worth noting that your tax liability does not necessarily cease on the day you depart. Nor does your duty to continue filing tax returns. Even if you are a non-resident, any income you earn in the UK is still taxable.
Find Out More
For more information, please don’t hesitate to contact the SCS Financial Management. We are more than happy to answer your British expat tax queries. Call us today on 01737 373707. Alternatively, fill out our online contact form and we will be in touch.
