The UK taxes UK residents on worldwide income. For foreign nationals living or working in the UK, this can cause a problem with reporting and double taxation as income or gains which arise back home or in other, non UK countries, may also be taxed in those countries.
Fortunately, the UK has some very beneficial rules which allow a non UK domiciled individual (very broadly, those whose long term home is not the UK) to claim to use the remittance basis of taxation. This means that income and gains will only be taxed in the UK if it is remitted (brought in) to the UK. Used correctly, it is exceptionally beneficial and can radically reduce the amount of tax payable in the UK.
Unfortunately, the legislation governing the use of the remittance basis changed dramatically in 2008 and it is no longer automatic. It must be claimed. The new legislation is also littered with complexities. With professional advice, these complexities can easily be overcome but without professional guidance you are almost certain to get into difficulty. This is legislation where the devil is in the detail and it is imperative that you have a good understanding of how to manage your tax affairs.
In addition, from 6th April 2018, non UK domiciled individuals who have been UK resident for 15 out of the previous 20 tax years are deemed to be UK domiciled for UK tax purposes. If this applies to you, please refer here.
It has never been more important for foreign nationals and non UK Domiciles to take good tax advice as early as possible after their arrival in the UK to ensure that they are aware of how to avoid being heavily penalised by the new rules.
Often we meet people who have been resident in the UK for several months or even years before they finally seek advice only to discover they have inadvertently moved non UK money in a way that has caused them to have a large UK liability which could so easily have been avoided, or disposed of offshore funds which can lead to a larger than expected tax liability in the UK.
British Taxpayers can work with you to understand your personal situation and advise you on how to ensure that your non UK savings are protected and are arranged in such a way to maximise the ability to move funds in and out of the UK without causing an unnecessary tax liability.
We can discuss your situation and objectives with you in detail and establish the most cost effective basis of taxation for you to use. Whether you need to file a UK Tax Return on the Remittance Basis or the Arising Basis, you can be confident that your UK tax liability will be as low as possible.
Your situation may change as your stay in the UK progresses and we will actively encourage you to keep in touch and update us with changes to your employment or financial situation as even small changes can have a large impact on your personal tax liability in the UK.
By building a good working relationship, we will have a good understanding of your situation which means you will be kept up to date with relevant changes to legislation or guidance which may affect you while you are in the UK.
We are members of the Association of Expatriate Tax Practitioners who meet regularly with HMRC and members of the ‘Big 4′ accountancy firms to discuss ongoing tax problems produced by the April 2008 changes. This means that we often amongst the first to receive notifications of changes in HMRC views and policies.
If you are a non domiciled or foreign national working or living in the UK, please give us a call for an initial discussion about how we can help you.