| If you are leaving the UK to work overseas, we can help you organise your finances to minimise your tax liabilities. How you are taxed in the UK after your departure depends on how long you intend to remain overseas and where you hold your income and investments.
Here are some of the ways in which Xpatria can help you to reduce you tax bill:
Avoiding UK tax on your employment income – If you leave the UK to work overseas for more than a complete UK tax year, you may be able to avoid UK tax on any employment income you receive whilst you are working overseas (even if this is paid in the UK). Your job must be full time and there are restrictions on the number of days you can spend back in the UK whilst you are working overseas, although these are fairly generous.
Xpatria can claim this tax relief on your behalf - retrospectively if required. If your wages are paid by a UK company, we can obtain clearance from the UK tax authorities to enable your employer to pay you without deducting UK tax. BACK TO TOP
Building up UK tax free funds –If you leave the UK to work overseas for more than a complete UK tax year, you will probably be able to avoid UK tax on your employment income (see previous section). However, you will usually remain liable to UK tax on any other UK sources of income. You may be able to shelter this income from UK tax by using your annual tax free personal allowance.
However, if your UK income exceeds your personal allowance you may wish to consider other ways of avoiding UK tax. One solution is to hold your investments offshore, where you can build up funds free of UK tax. And it’s usually possible to bring your offshore funds into the UK when you return without incurring a UK tax charge.
If you are working overseas for several years, you may also be able to avoid UK capital gains tax if you sell UK assets whilst you are away. These rules are complex and bespoke advice should always be obtained in this area to avoid unnecessary tax bills.
Xpatria provides practical, personalised advice on how to build up UK tax free funds. We also show you how to repatriate funds to the UK on your return tax efficiently.
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UK tax refunds – If you work in the UK before you leave and have paid tax via PAYE, you may be eligible for a tax refund in the year of your departure. This is because you are eligible for a full year’s worth of personal allowance and lower tax rate bands, but you will usually not have received a complete year's worth of these in your PAYE withholding.
We can calculate the refund, and complete and file the paperwork required to claim back the tax. We can make sure that HM Revenue & Customs pays the refund directly into your bank account so that you don’t have to worry about cashing a sterling cheque whilst you’re overseas. BACK TO TOP
Tax free employer provided items – If your work abroad is only temporary, you may not be able to avoid UK tax on your employment income. However, in this case, if your employer provides you with accommodation and a subsistence allowance, and reimburses your travel costs, we may be able to claim that your employer can provide these items to you tax free. Without this tax relief, you would be liable to tax on the cost of these items to your employer. This is a valuable tax saving, especially in countries where the cost of living and the cost of housing are high.
We can claim these tax savings for you – retrospectively if required. We can also help your employer reduce their reporting responsibilities on these items for you and any colleagues in a similar situation. BACK TO TOP
UK tax status – When you leave the UK you will need to declare your tax status to the UK tax authorities. It is important to declare your tax status correctly, as mistakes can mean that you are not eligible for certain tax breaks.
Xpatria can help you complete the relevant forms so that your tax status is accurate and so that you qualify for all available tax reliefs. We will file your UK tax status claim with the UK tax authorities and deal with any queries that they raise on your behalf. BACK TO TOP
Letting your UK property – To keep their feet on the property ladder, many people choose to let their UK home whilst they are working overseas. If you are considering whether to let your home whilst you are away, we can help.
We can calculate estimates of your net rental income to help you plan for any ongoing UK financial commitments. Usually the agent (or the tenant if there is no agent) is required to withhold basic rate tax from your rental income and pay this to HM Revenue & Customs as a tax advance. If your estimated net rental income is below certain levels, we can obtain agreement from the UK tax authorities that you can receive your rental income without this tax deduction. We also advise on the future capital gains tax implications of letting the property, and give you tips on how to avoid this tax. And of course we can help you to file accounts of your rental income with HM Revenue & Customs. BACK TO TOP
Hassle free tax filing – In addition to tax planning, we provide a friendly and efficient tax return service. Xpatria prepares your tax return (claiming all appropriate tax reliefs) and calculates your tax liability. We always provide a written explanation of the tax return and our advisers are on hand to discuss the tax return with you if required. We will send you your tax return in pdf format and file it electronically with the UK tax authorities on your behalf. Alternatively, if you prefer paper copies and hard copy filing we are happy to oblige. Our tax return service includes liaison with the UK tax authorities (if required). BACK TO TOP
Reduced stress tax audits – Tax audits are never entirely stress free, but if the UK tax authorities choose your return for audit, Xpatria will support you throughout this process. We will liaise with the UK tax authorities on your behalf, attend any meetings with them and deal with any correspondence from them. We help to resolve tax audits promptly and fairly. BACK TO TOP
Xpatria provides a wide range of services to those leaving the UK to work overseas. Please contact us to obtain specific details of how we can help you. Why not take advantage of our free half hour consultation service? More
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