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Split year treatment

We do not deal much with foreign tax matters so apologies if this is basic stuff! Could someone please confirm that split year treatment would apply:

A UK domiciled client has been working in UAE for a number of years and intends to return to the UK part way through 2013/2014. Would split year treatment apply from the day he returns and his UAE earnings in 2013/2014 would not be subject to UK tax?

If he goes to a different EC Country from UAE for whatever length of time and then comes to the UK would split year treatment also apply from the day he returns to the UK and his UAE income is not taxed in the UK?

Thanks!

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21st Feb 2013 13:07

Split year treatment is exactly that. Up to the time he returns to the UK he is non-resident, providing he was non-resident throughout the previous tax year. When non-resident the only income reported on a UK tax return is that arising here. Be careful as that includes all dividends from UK companies even if the work which the UK company did was performed overseas. However, salaries from UK Companies for overseas duties are not declared.

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21st Feb 2013 14:32

Have you got the HMRC Reference for this

essex accountant wrote:
Be careful as that includes all dividends from UK companies even if the work which the UK company did was performed overseas. However, salaries from UK Companies for overseas duties are not declared.

Although I agree on the salaries point, I've been struggling to find an explicit HMRC on-line reference manual entry for this.

Equally, on the dividends being charged to tax - not sure about that as that was the circumstance Tina Green of Topshop fame used as a tax avoidance mechanism, specifically dividends paid to a non-UK resident being tax free. 

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By KT2
26th Feb 2013 11:12

I think that if you read this helpsheet it will explain how/why the Tina Green mechanism works

http://www.hmrc.gov.uk/helpsheets/hs300.pdf

HMRC6 confirms the treatment of employment income

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