Overseas Income Tax

5 ties someone could have to UK?

Family - partner or children UK res

Accom - place to live available for 91 days

Work - individual spent more than 90 days in UK in prev 2 TY

Country - spend more days in UK than any other country

What is a split year under Case 5?

Where you are starting full time work in the UK

What is split year under Case 8?

Where you start to have a home in the UK

What is split year under Case 1?

Starting full time overseas

• TP is UK resident in previous year

• Non-UK res in following year

• TP satisfies overseas work criteria in year of departure

What is the overseas work criteria?

Wok on average 35 hours a week abroad with no significant breaks

Be in UK fewer than 90 days (reduce proportionately) of which no more than 30 (reduce proportionately) must be UK workda

What is Case 6 split year?

ceasing full time work overseas

What is the criteria to be eligible for FIG?

Must be UK res under SRT

Must have been non-UK res for at least 10 TY prior

Recent arrival - only made for first 4 years

Relief must be claimed no later than 12m following normal filing

Tax implications of claiming FIG?

No tax on foreign income, you will however lose PA, and cannot use overseas losses

What id double tax relief?

lower of:

overseas tax suffered or

the UK tax liability on that foreign income

What else can you do with foreign tax, as opposed to taking as a credit against UK tax?

Reduce the foreign income - advantageous where person has losses in the year

What income is taxable in the UK for a non-UK resident?

UK income

When can non-resident individuals claim UK PA?

If they are UK national at any point in the year

Nationals of EEa states

Residents of channel islands

Employees of British Crown

If their DTT agreement allows it

How to calculate max UK tax liability for non-UK resident individual?

Tax from disregarded income

Plus tax from other UK income

What is disregarded income?

UK interest, dividends from UK co’s and authorised unit trusts

What is s.811 ?

If dividend due to non-UK resident, they will be treated as having paid tax at 8.75%

Tax implications of UK tenant paying rent to non-res landlord?

Tenant must withhold BR tax from rents, inform HMRC and continue to do so until otherwise notified by HMRC

What is an internationally mobile employee?

They work inside and outside UK, or is non-UK resident for all/part of TY

What is the date of receipt for taxing earnings in UK?

Earlier of when payment is physically made or entitlement arises

How to calculate overseas work relief?

Qualifying employment income * non-uk days / total days

What is the annual limit of OWR?

Lower of

30% of qualifying employment income

£300k

What is trailing income?

Income paid in a different period to which it is earned.

It is taxable by reference to the status of the employee in the period to which the income relates

For an individual working in the UK, when are earnings not taxable in the UK?

If they are incidental to performance of O/S duties or

Exempt from tax under the Income from Employment article

What are the three conditions for treaty exemption to apply?

Employee present in UK for 183 days or less

Employee working in UK for non-UK resident employer

Remuneration is borne by overseas entity

What is the tax effect of OWR?

Earnings attributable to duties outside UK will be exempt from UK tax.

What if OWR is eligible but not claimed?

EE receives credit in UK for any tax paid overseas on non-UK earnings.

UK co (sub of O/S co) is going to have an o/s employee do secondment - what should they do

consider notifying HMRC of their intention to exclude a proportion of Mr Park’s pay from PAYE

How is securities income taxabel in the UK for resident/non-resident

Non-resident - only taxable in UK if EE had UK workdays

When will a UK sub of O/S parent be obliged to apply PAYE to securities income?

If parent is listed - RCA

For FIG, under s373, what payments/reimbursements are not a taxable benefit?

Travelling to UK to perform duties

Inoculations and visas required

Expenses travelling outside UK after performing UK employment duties

if reimbursed to employee