Statutory Residence/Split Year tax

Intro

Dr H had been working full-time for the NHS, but was retiring in 2018. He had been offered a fixed position in Qatar and was going to continue with some consultancy work, honorary assignments and lecturing.

Issue

How an individual is taxed in the UK will depend on whether they are considered a UK tax resident or not. Dr H needed tax advice to ensure he understood the tax implications associated with the move and any associated compliance requirements.

How we solved it

We advised Dr H on the application of the Statutory Residence Test and the potential for split year treatment prior to his move.

The Outcome

By working with us in advance of his move to Qatar, and the start of the tax year, he was able to understand his potential UK tax residence position, the impact of this on his taxable income. He was also able to structure his movements and lecturing assignments to mean that he would not be treated as resident for UK tax purposes in the relevant tax year. Thisultimately meant that his Qatar employment income would not be subject to UK tax, and sogiving him a substantial saving.

Intro

Reviewing the Statutory Residence Test (SRT) can be complex as there is a lot of detail packed into each of the cases and there can be a very fine line between residence and non-residence.

Issue

The client had personal family issues in the UK and wanted to ensure that he could spend the maximum time with his family before having a negative impact on his UK tax status. He was planning to spend a large period of time overseas for work purposes and was keen to learn how much time he could spend in the UK before becoming a UK tax resident. Generally speaking, as a UK tax resident, you are taxable on your worldwide income. However, as a non-UK tax resident, you are only taxable on your UK workdays and any UK sourced income (such as rental income).

How we solved it

Using the client’s anticipated travel pattern for the tax year in question, along with their ties to the UK, we were able to provide advice in advance of the tax year to clearly set out guidance around days allowed back in the UK, whilst still being considered a non-UK tax resident and therefore minimising the risk of any double taxation with the other countries the client was working in.

The Outcome

The client was able to clearly understand the days that they could spend back in the UK for work and personal reasons prior to triggering UK tax residence and was able to maximise the time spent back visiting his family, without worrying about his UK tax position.