We have many clients that live abroad but still have to pay tax in the UK. Plus, some of our clients work abroad and again need to pay UK tax.
We wrote this article to help explain how this works in case you or someone you know is planning to spend more time abroad. It is important to be well informed as the tax implications in these situations can be complicated.
What defines a UK resident?
If you are a UK resident, then you have to pay UK taxes. The official definition of a UK resident can be found on the HMRC website – Tax on foreign income.
The number of days that you spend in the UK during each tax year is used as an indicator of whether you are a UK resident or not.
- If you spend 183 or more days in the UK in the tax year, or
- Your only home is in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
Personal tax allowance for Expats
If you are classed as a resident of the UK, then you have to pay tax on your income. This applies to income from the UK (e.g. renting at a property in the UK) or from abroad. The current personal tax allowance on your UK income is £12,500 for the tax year 2019/20.
Capital Gains Tax for Expats
Capital Gains Tax is a tax on the profit when you sell your property in the UK. This needs to be paid if you have not been living in the property for nine months. For the latest update on Capital Gains Tax read our blog - Changes to Capital Gains Tax from 2020.
What if your situation changes?
It is vital to keep the HMRC aware of any changes to your circumstances. Some common factors that can affect your Expat status are:
- The time you spend in the UK changes
- If you buy or sell a home in the UK
- You change your job and source of income
- your family moves in or out of the UK, or you get married, separated or have children
We have a lot of experience supporting expats so if you or someone you know needs advice; please do get in touch.
You can call 01623 490 120 or email