Foreign earnings taxable if no longer UK resident?

Sole trader moving to Australia during UK tax year 21-22. Will my Aus earnings be taxable in UK?

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I'm a sole trader planning to move to Australia in November 2021. As of that date I will be an Australian permanent resident and no longer domiciled in the UK.

My last invoice in the UK will be submitted/paid in October. Once in Australia I plan to work on either a PAYE or self-employed basis within their tax system. What are the tax implications for this?

Will HMRC require me to declare my Australian earnings on my 2021-22 tax return? I do not plan to bring any Australian earnings into the UK in the UK tax year 2021-22. 

Should I close my sole trader business in the UK before I leave for Australia? Is the date I close my business considered the end of my accounting period or is it still April 5th?

Any advice gratefully recieved.

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By SteveHa
18th Jan 2021 15:46

Residence and domicile are different concepts, and so you are immediately approaching the question wrongly by conflating the two. Purely on the basis of the very limited information in your question, you will become non-resident, but not non-domiciled.

Having said that, if you do cease to be UK resident for UK tax purposes, then HMRC will not have taxation rights on income you earn other than that earned in the UK from the date you become non-resident.

I am going to qualify this, though. Rules surrounding residence, domicile and tax are complicated, and in particular for your circumstances, becoming non-resident in the first place is dependent upon what you do next year.

Depending on complexity and amounts, you may be better advised to engage a professional that you can speak to in detail about your circumstances, even if only for ad hoc advice.

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