If you leave the UK to live abroad, whether permanently or on a temporary basis, there are tax implications and HM Revenue & Customs (HMRC) should be informed.
If you leave part way through a tax year you may be entitled to a tax refund, in particular in respect of some tax paid at source on employment income.
Some other key UK tax points to bear in mind are:
Whether or not you are UK resident for tax purposes for a tax year is determined by a statutory residence test, which is a combination of days spent in the UK and factors connecting you to the UK.
In the tax year of departure you may be treated for tax purposes as UK resident for the first part of the tax year and non-UK resident for the second part of the tax year.
Once non-UK resident you may still have a UK tax liability (and reporting obligations) in respect of UK source income, such as investment or property income.
The UK has double taxation agreements with most other countries which means that tax is not suffered twice on the same income or gains. It is important to establish for any particular type of income or gains in which country the income or gains must be reported.
If you intend to return to UK, many tax planning opportunities exist in the period prior to returning, depending on circumstances and the other country of residence and its tax system.
A change of residence does not mean a change of domicile; and it is an individual’s domicile that is they key factor which determines exposure to inheritance tax.
If you would like to discuss, or require assistance please contact Richard White on Rugby 01788 539000 or Amy Read Leicester on 0116 261 0061.