Originally published by Expat Investor - January/February 2003
Bo Kehinde, a tax adviser with law firm Howard Kennedy , has put together some vital tips for keeping expats on track with UK tax management. Mr Kehinde begins by explaining who qualifies as a non-UK resident for tax purposes.
Your UK residence status ceases from the day following your departure to the day before you return, provided:
- You go abroad to work full time under a contract of employment for a period that covers at least one full tax year (i.e 6 April to 5 April).
- Your visits to the UK during a four year period of absence do not average more than three months per tax year.
- Your visits to the UK do not amount to six months in any one tax year.
What to do before you leave the UK
- Submit form P85 to the Inland Revenue to determine your residency status.
- Claim refunds of UK tax to which you may be entitled.
- Tax plan according to the rules and regulations of the country where you will work.
- Review your social security, medical insurance and sick pay position with specific regards to the country or countries you will be visiting.
- Consider how your absence will affect your share options or pension benefits provided by your employer.
- Consider carefully the benefits of waiting until you are non-resident before selling assets which may be subject to capital gains tax (CGT).
- Consider matters relating to letting your home.
- Inform banks and building societies where you hold accounts so that interest may be received gross.
Bo Kehinde is a tax adviser at Howard Kennedy, the London-based law firm.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.