Split year treatment on residency
A client (born in the UK) left the UK in May 2007 and worked abroad until August 2010 with only about 16 days spent in the Uk during that time. He has no property and no family other than a few relations in the UK. His salary from that period was not remitted to the UK. What happens for 2010/2011 now he is back? I have read HMRC6 and it seemed to mention extra statutory concession A11, which would allow him to split the year's income between salary earned whilst still overseas that would not need to be included on his tax return if not remitted, and salary earned in the UK now he has returned, but I wasn't quite sure whether it would make a difference if he stayed in the UK now or got another job overseas? If anyone could give some more assistance I would be grateful. Thanks.
UK residence
He was presumably resident in the UK for tax purposes up to May 2007, when he went abroad to work for a period spanning at least one complete tax year. If so, he would be treated as non-resident in the UK from the day after he left and his earnings from work done abroad would not have been taxable in the UK. Whether or not he was born in the UK, has property in the UK, has family or relations (what is the difference?) in the UK or has remitted his earnings overseas to the UK is irrelevant.
He resumes residence in the UK from the day he returns after finishing his overseas job and will be taxable in the UK on all future earnings unless or until he goes abroad again for a job which will span a complete tax year - in which case, as before, he will be treated as non-resident from the day after he leaves and his earnings from that foreign job will not be taxable. However, if he goes abroad for work that does not span a complete tax year, he will remain resident in the UK and therefore liable to UK tax on his earnings from that short-term overseas job.
The DTA is not relevant
... to the question "What happens for 2010/2011 now he is back [in the UK]?". If he goes abroad again to work, you might want to check the DTA with the country to which he is going (not the one where he has just come back from), but the UK tax position is as I set it out in my earlier reply.
Check the DTA
Have you had a look at the DTA with the countries involved? This should always be the starting point. HMRC will have their set of rules but the foreign authorities will have another set which is usually completely different. Which country did the client move to?
FAI Accountants. Residency tax advice