Immigration Corner | Do I owe taxes?
Dear Mr Bassie,
I plan to return to the United Kingdom after spending some time abroad and I would like to know if there will be any tax implications when I return, having lived and worked abroad.
Persons may be liable to pay tax if they return to the United Kingdom after living abroad and they will usually be classed as a United Kingdom resident again. This means that they will be liable to pay United Kingdom tax on: their United Kingdom income and gains; any foreign income and gains - although those persons may not have to if their permanent home (that is their domicile) remains outside of the United Kingdom.
If persons have remained United Kingdom residents while they were abroad for less than a full tax year, from April 6 to April 5 of the following year, they would be liable to pay United Kingdom tax. This means persons will usually pay United Kingdom tax on foreign income for the entire time they were away.
When a person returns, he/she may need to register for self-assessment. For example, that person may start working for himself/herself or have other income or gains from the United Kingdom or from abroad. A person does not need to register if he/she is an employee and does not have other untaxed income to report.
If a person returns to the United Kingdom within five years, he/she may have to pay tax on any foreign income or gains that were brought into the United Kingdom while he/she was a non-resident, and this does not include wages or other employment income.
It should be noted that 'taking back' to the United Kingdom includes transferring income or gains into a United Kingdom bank account, and chapter nine in HM Revenue & Custom's (HMRC) guidance on 'Residence, Domicile and the Remittance Basis' explains the rules for taking back income or gains to the United Kingdom.
These rules are called 'temporary non-residence' and apply if both: a person returns to the United Kingdom within five years of moving abroad, or five full tax years if he/she left the United Kingdom before April 6, 2013; if a person was a United Kingdom resident in at least four of the seven tax years before he/she moved abroad.
Just for completeness, a person will usually start paying national insurance again if he/she works in the United Kingdom.
If a person did not pay it while he/she was abroad, that person can check their national insurance record to see how their state pension might be affected. A person should endeavour to find their national insurance number if he/she has lost or misplaced it.
It should also be noted that a person does not need to pay national insurance if he/she is not returning to the United Kingdom permanently. However, if returning permanently, a person can contact the International Pension Centre if he/she would like to move a pension to the United Kingdom.
- John S. Bassie is a barrister/attorney-at-law who practises law in Jamaica. He is a justice of the peace, a Supreme Court-appointed mediator, a fellow of the Chartered Institute of Arbitrators, a chartered arbitrator, and a member of the Immigration Law Practitioners Association (UK). Email: firstname.lastname@example.org.