Non Resident Tax UK
Am I a UK Tax Resident for tax purposes?
To determine your UK tax residency status there are various Statutory Residence Tests to be applied split into the various parts.
If you have been in the United Kingdom for greater than 183 days then you do not need to consider these tests.
You will be resident in the UK for a tax year and at all times in that tax year if:
- you do not meet any of the automatic overseas tests
- you meet one of the automatic UK tests or the sufficient ties test
Automatic overseas test
There are 3 tests to consider.
Automatic UK test
First automatic UK test
Second automatic UK test
- there is or was at least one period of 91 consecutive days when you had a home in the UK
- at least 30 of these 91 days fall in the tax year when you have a home in the UK and you’ve been present in that home for at least 30 days at any time during the year
- at that time you had no overseas home, or if you had an overseas home, you were present in it for fewer than 30 days in the tax year
Third automatic UK test
- you work full-time in the UK for any period of 365 days, which falls in the tax year
- more than 75% of the total number of days in the 365 day period when you do more than 3 hours work are days when you do more than 3 hours work in the UK
- at least one day which has to be both in the 365 day period and the tax year is a day on which you do more than 3 hours work in the UK
Sufficient Ties Test
If you do not meet any of the above tests then you must use the sufficient ties test to work out your UK residence status.
You need to consider your connections to the UK, known as ‘ties’, to determine if your ties, together with the number of days you spend in the UK, will make you resident in the UK.
If you were not a UK resident in any of the 3 UK tax years before the one you are considering, you’ll need to check if you have any of the following:
- a family tie
- an accommodation tie
- a work tie
- a 90 day tie
- country tie
Submitting a Self-Assessment Tax Return
- Salary earned from working abroad
- Rental income
- Dividends, interest, and rental income
- Income & gains from stock option exercises
- Taxation of investment income and capital gains
- Disposal of UK property
- Principle residence gains and losses
Non-resident Tax rates 2022/2023
Basic Rate £12,571 to £50,270 20%
Higher Rate £50,271 to £150,000 40%
Additional Rate Over £150,000 45%
You are entitled to a UK Personal Allowance of tax-free UK income each year if any of the following apply to you:
- you hold a British passport
- you’re a citizen of a European Economic Area (EEA) country
- you’ve worked for the UK government at any time during that tax year
You may also qualify as stated in the double-taxation agreement between the UK and the country you live in.
Claiming the Personal Allowance
- savings interest up to £5,000 of interest and not have to pay tax on it. This is your starting rate for savings.
- dividends, if you own shares in a company up to £2,000 of dividend income and not have to pay tax on it. This is your dividend allowance.
Working out Tax on Dividends
Basic Rate 8.75%
Higher Rate 33.75%
Additional Rate 39.35%
- your first £1,000 of income from self-employment – this is called your ‘trading allowance’
- your first £1,000 of income from property you rent (unless you are using the Rent a Room Scheme)
Paying Less Income Tax or Claiming Tax Relief
- have incurred specific cost of running your business if you are self employed.
- If you are employed and have used your own money and incurred expenses for travel and other items that you must acquire for you to do your job.
If you are married or in a civil partnership
When you can get tax relief
- employer takes workplace pension contributions out of your pay before deducting Income Tax
- rate of Income Tax is 20% – your pension provider will claim it as tax relief and add it to your pension pot (‘relief at source’)
Limits to your Tax-Free Contributions
- 100% of your earnings in a year – this is the limit on tax relief you get
- £40,000 a year – ‘annual allowance’ 2022/2023
- £1,073,100 in your lifetime – this is the lifetime allowance up to 2025/2026
Migrant Member Relief
- were paying into the scheme before you moved to the UK
- were receiving tax relief on those contributions
- the pension scheme is a qualifying overseas pension scheme (QOPS)
Organising your income when leaving the UK
Returning to the UK
Penalties for non-compliance
UK non-resident tax return services
We at GM Tax provide fixed fee quotes for advisory work and tax returns.
- A Non-Resident Tax Return
- A Capital Gains Tax Return
If you are leaving the UK and would like a fixed fee proposal from a firm of UK & Australian tax advisors that understands the issues affecting individuals leaving the UK please complete our online enquiry via our contact us button or by calling a GM Tax office closest to you.
GM Tax also offers the following services:
- Tax planning advice and guidance with regards to your residency status in Australia and the UK, eligibility for split year treatment and also domicile status in the context of Inheritance Tax (IHT) planning.
- Preparation of UK tax returns, with all returns submitted to HM Revenue electronically where possible.
- Advice on the tax position where a property in the UK is being let while a taxpayer is living overseas.
- Preparation of Australian tax returns, with all returns submitted to the ATO electronically where possible.
- Assistance to ensure UK or overseas sourced income of those who are non-residents of the UK is properly taxed and is not taxed twice, or double taxed.
- This last point is particularly relevant to those who have UK or overseas sourced income or capital gains which may also be subject to tax in the country in which the taxpayer is now resident.