TAX PLANNING WHEN MOVING TO THE UK
Arrival consultations are a useful way of covering a number of tax planning and compliance issues following a move to the UK. A consultation would typically include:
Residence and Domicile claims
The basis on which an individual is taxed in the UK is largely dependent upon their residence status. Broadly, an individual can be a non resident, temporary resident or permanent resident. The status assigned to an individual has as much to do with the intended length of stay on arrival as days of physical presence. The status allocated by the HM Revenue and Customs could be the difference between paying tax on worldwide income, or UK source income only.
An individual can also claim 'non domicile' status if this is beneficial. Domicile is less governed by the length of an assignment, and individuals who do not intend to remain in the UK permanently are likely to be able to claim non domicile status. An individual who is considered non domiciled in the UK can often structure their affairs in such a way to only pay tax on overseas investment income and gains to the extent that the income or proceeds are remitted to the UK.
Tax Planning
There are a number of tax planning strategies that may be available to individuals moving to the UK which can significantly reduce the liability to UK tax. Some of these strategies require the correct structuring of financial affairs at the outset, and an arrival consultation will provide the opportunity to explore and maximise these claims.
In general, tax savings can be made for individuals who:
- Arrive in, or leave the UK part way through a tax year
- Intend to remain in the UK for up to three years and will have business trips outside of the UK
- Are assigned to the UK by an overseas employer for a period of up to 2 years
Tax Compliance
Individuals may be required to file self assessment tax returns for each tax year ending 5 April. We can discuss these matters with you and determine whether filing UK tax returns will be required and / or beneficial.