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No longer resident

No longer resident

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I have a client who although born in America has lived in UK for past 35 years.  This year he sold his house and permanantly moved back to US.  He receives US and UK pensions plus dividends from his UK company.  He will keep UK company as his work is in UK - will travel back and forth.  Dividend income normally puts him into higher rate tax so there is likely to be a UK liability if no allowance given for not living here any longer.

It is a long time since I did anything on non residency - am i correct that if he spends 6 months out of the country in the tax year he pays no UK tax?  If so, how is this claimed as I don't see anywhere to tick on SA Return on the HMRC website.

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By Wall1690
14th Oct 2014 09:53

If using the HMRC software to submit the Return it doesn't give you an option to complete a Residence page. You either need to submit the Return on paper by 31 October or use commercial software.

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Replying to Duggimon:
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By micki
14th Oct 2014 11:00

Thank you for that - very interesting.  Problem being that my client will fall into the split tax year scenario about which the article really doesn't say much.  Does anyone else know the rules on this bit?

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By Chipette
14th Oct 2014 11:25

Split year

 

http://www.hmrc.gov.uk/international/rdr3.pdf

 

Ch 5 onwards

 

(isn't Google wonderful?)

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Replying to marks:
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By micki
14th Oct 2014 13:39

Thanks chipette.  Google is

Thanks chipette.  Google is great if you know exactly what you want and how to phrase the question correctly.

 

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Replying to Di:
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By Chipette
14th Oct 2014 14:28

I agree!

micki wrote:

Thanks chipette.  Google is great if you know exactly what you want and how to phrase the question correctly.

 

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By Martin B
14th Oct 2014 14:27

No longer resident

flagging

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By Portia Nina Levin
15th Oct 2014 13:56

Blind leading the blind

Actually, Google's a dangerous tool in the hands of people that do not know what they are talking about.

There are things you know you know, and there are things you know you do not know (which is where Google comes in). The dangerous things though, are the things you do not know that you do not know.

Such as:

residence is not determined under the UK statutory resident test in isolation; the UK/US treaty needs to be considered as well. Perhaps he is US resident under the treaty for the entire year in any event.US citizens are taxable in the US on their worldwide income, so the amount of tax he pays in the UK only has a bearing on how much double tax relief he will get in the US.

He has been dealing with his US taxes properly for the past 35 years, I hope?

Stay within your competence, or sooner or later it will bite you in the arse[***].

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Replying to Accountant A:
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By micki
15th Oct 2014 14:05

I do know my competence - hence the question.  And anything US related has been filed by a specialist at extortionate rates.  My client was going to file this years US tax forms himself as he now lives over there, but when he got 12 forms to read and fill in, he gave up!  makes me think our tax system is not as bad as all that.

 

 

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By David Treitel
16th Oct 2014 13:11

Hopefully your client took pre-move advice before he relocated to the United States designed to ensure that his overall global (US + UK) tax position is optimised.

David Treitel | Managing Director | American Tax Returns Ltd

The Old Exchange, 12 Compton Road, London, SW19 7QD

Tel: 020 3542 6330

Email: [email protected]f

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