Expat Tax Returns
You might be living abroad, but that doesn't necessarily mean you're out of the taxman's reach. Here's a quick breakdown of HMRC's rules about self assessment tax returns for expats.
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You might be living abroad, but that doesn't necessarily mean you're out of the taxman's reach. Here's a quick breakdown of HMRC's rules about self assessment tax returns for expats.
If you're living or working abroad, you may still have to pay UK tax on some or all of your income. It all depends on where the money's coming from and what your tax residence status is. This can be a tricky issues, so it's definitely worth getting professional advice about it.
Generally, you only pay UK tax on foreign income if you're a UK resident. There are specific rules about what counts as UK residency, but they basically boil down to:
If you answered yes to either of these, then the chances are you're a UK resident in the taxman's eyes.
Even expats living permanently overseas sometimes find themselves in HMRC's sights. For example, you might have to pay UK tax if:
In most cases, you'll find yourself filing a self assessment tax return for any income that qualifies for UK tax.
Yes, you can still claim a refund of any overpaid UK tax if you're living overseas. For example, if you haven't received the full benefit of any tax-free allowances you qualify for, you can easily find yourself being owed some tax back. Similarly, if you haven't claimed the tax relief you're due for your work expenses, or if you're a “non-resident landlord” renting out UK property while you're abroad, you might qualify for a tax refund. The same is true if you've left the UK part-way though a tax year.
The form you need to use to claim your tax rebate will depend on your circumstances. Talk to RIFT to make sure you're on the right track.
Usually, your ''domicile'' is the country where you have your permanent home. Strangely, it's possible to be a UK resident with a permanent home abroad. It's called being 'non-domiciled'', and there are special tax rules about that.
For expats, you might still be considered to have a ''deemed domicile'' in the UK under certain conditions. For instance, for inheritance tax, being a UK resident for 17 of the last 20 years might make it your deemed domicile.
The rules can be ticky, which is one of the many reasons why it's best to get professional advice. You really can't afford to go on guesswork here.
HMRC uses a standard residency test to decide whether you qualify for UK tax. Your tax residence status depends mostly on the number of days you spend in the UK, along with some other factors. For example, you're automatically considered a non-UK resident if:
There's a lot more to it than that, of course, and getting your status wrong can be a nightmare. Get in touch with RIFT to be sure where you stand.
Generally, you'll sort out your UK tax with a self assessment tax return. You can do it online by registering with HMRC and getting a Unique Taxpayer Reference (UTR) number. Don't ignore a demand from HMRC, or assume it was a mistake. Even if you end up not owing any UK tax, you might still have to file a return.
There are hard-and-fast deadlines for filing a self assessment return, and for paying any tax you owe. Penalties start at £100 for filing even one day late, so don't leave it too long!
Absolutely! RIFT has been helping people file their self assessment returns since 1999, and we're the UK's top tax experts. Call on tel:01233 628648 or email info@riftrefunds.co.uk to see how we can keep you out of hot water overseas. We specialise in tax refunds, we could even put money back in your pocket while we do it!
Missing a deadline for filing a Self Assessment tax return can quickly lead to penalties. Even if you're sure it's a mistake on HMRC's part, you really can't afford to ignore a demand for a tax return. Get in touch with RIFT if you're confused about why HMRC's chasing you over your Self Assessment paperwork. If there's a problem, we'll get it fixed. Even if you're already facing penalties for missing a filing deadline, we may still be able to help.
The penalties for failing to file a tax return, or for not paying up what you owe, start mounting up fast. The longer you leave the problem without fixing it, the worse things will get. Here's a quick run-down of some of the penalties you could be looking at:
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