Moving to a new country whether for work or to start a new life for yourself is becoming a popular move for a variety of people in the UK. Many people retire to another country to enjoy their twilight years to give just one example.
But you’ll find expat hubs in many countries like France, Spain and Turkey to name just a few. An expat or expatriate to give them the full title can be residing in a foreign country temporarily or permanently. And while you might traditionally be thinking of retirees when it comes to expats many are skilled workers who have found jobs abroad.
Whatever you’re situation if you’re currently living or working abroad then you’re an expat and that means filling in your self assessment tax return will be a little more complicated. But with our helpful guide it will be a simpler and easier process.
Filling In Your Self Assessment Tax Return
The first step you need to take before you start filling in your self assessment tax return is finding out whether you’re classed as a UK resident (for tax purposes) or not. Even if you are officially registered as a resident of another country you could still be a tax resident of the UK.
Both UK residents and those labelled as non residents may still have to fill in a self assessment tax return but the way they go about it is different. Using the Statuary Resident Test HMRC will decide whether you’re classed as UK resident or a non resident.
The first step of this is all about how long you’ve been in the UK since the start of the tax year, if it’s more than 183 days you’ll be classed as UK resident. There’s also the Automatic Overseas Test which looks whether you have a home in the UK and the amount of time you’ve spent there.
The Sufficient Ties Test is another factor that may be looked at, this test examines whether you have sufficient ties in the UK. This could be family, business or property, it’s a complicated process but HMRC can help you work out whether you’re a classed as UK resident or not if you’re unsure.
What Will I be Taxed On?
If you’re classed as a UK non resident you can still be taxed on some of your UK income even though you are now living in a different country. Common types of UK income received by expats include private pension and rental income. In many cases you can reclaim the tax you have already paid in the UK. There are many factors to take into consideration before starting the process including the double taxation treaty between the UK and the country you now live in and what type(s) of income you have paid tax on in the UK.
Can I Get Tax Relief?
If you’re taxed twice by the UK and the country you now reside in then you can claim tax relief from the HMRC by using a claims form or self assessment tax return. If you’re classed as a non resident then you can claim using the corresponding form for the country you’re residing in, or on your tax return.
In the majority of cases you will get back the full amount unless stated under the specific double taxation treaty between the UK and your country of residence.
It’s worth noting that national insurance can also be reclaimed in some circumstances.
Filling In A Tax Return
If you are classed as a UK resident then you will need to fill in a self assessment tax return to declare any foreign income. If you are classed as a non resident then you will still need to fill in a self assessment tax return if you have certain types of income. For example rental income received by a non resident landlord.
The online software made available by HMRC does not support the non resident pages needed for a UK non resident return meaning you need to use third party software or complete a paper tax return.
