Non-UK residents returning to the UK

No matter how much you love living and working in Malaysia, or anywhere overseas, the Covid 19 epidemic raises the prospect of a return to the UK at some stage, soon. Other factors such as childrens’ education, or being close to and caring for elderly parents, or relatives, may precipitate your return to the UK. So what will this mean for you, and your loved ones, as non-UK residents? The best way to find out is to ask a good, professional non-UK resident tax advisor, like The Taxman UK.

Rules for non-UK residents returning to the UK

HMRC has UK anti-avoidance rules designed to ensure that, if you become non-resident for a relatively short period of time, certain types of income; capital gains, and remittances made during your non-residence period, will be taxed when you return to the UK. If you have been working, or living, overseas for an extended period of time then HMRC has rules for the UK tax position of returning non-UK residents for less than six tax years. There are also tax rules if you are returning to the UK and were born in the UK with a UK domicile of origin, but have acquired an overseas domicile whilst a non-UK resident.

It may sound complicated. You and your loved ones can make your non-UK resident life less taxing with some good advice from a professional non-UK tax advisor, like The Taxman UK. It’s better to do this before you return to the UK to give you enough time for tax planning. When you relocate to the UK you may have a lot of other things to do as you settle back in at home, so the sooner the better you ask your non-UK resident tax advisor for assistance.

Rules for non-UK residents returning to the UK
Temporary non-UK residents

Temporary non-UK residents

You and your loved ones are regarded as a temporary non-UK residents if;

  • You were resident in the UK in four or more of the seven tax years immediately preceding the year of departure, and
  • You were a non-UK resident for five years or less

Where these conditions are met, certain types of income, or gains, received during your temporary non-UK residence are treated as arising in the tax year that you return to the UK, and charged to UK income tax, or capital gains tax, accordingly.

This can affect any capital gains you have made, dividends, maturity of life insurance policies and withdrawals, offshore income gains and certain payments from pension schemes, including flexible drawdown withdrawals, as well as remitted foreign income. Overseas tax paid on the income or gains can usually be offset against the UK tax liability, up to the amount of UK tax payable.

Your next step for non-UK resident tax

Timing your return to the UK can be critical in determining the tax treatment of your income, capital gains, and even inheritance tax, arising after you start UK residence. It’s in your own best interest to seek good, professional tax advice as soon as possible to assess the tax impact of returning to the UK.

Please don’t hesitate to contact one of our experienced non-UK resident tax advisors by sending us an enquiry at help@thetaxmanuk.com for an initial consultation. Good tax advice will save you time, money and stress, whether you are planning to return to the UK, or are waiting until you have to.

The Taxman UK  Making Life Less Taxing for non-UK residents”

Your next step for non-UK resident tax