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Non resident satus

Non resident satus

I have a client who is a UK citizen. He left UK to work abroad in 1993 and worked abroad for about 9!years. He came back to UK in September 2002. 

During these years ,  he never spent more than 90 days in any year in the UK.
In reality , his visits to the UK were very  short .  

He worked abroad as a contractor but some of his earnings were paid to a comapny incorporated in thr UK of which he was a director. The earnings were paid into a UK based bank and he drew a a dividend ?

I have following queries.

1) What is the tax liability of the individual  for the earnings 

2)  how does it affect the non resident status of the individual and the funds ? If he bought a property with these funds whilst we was working abroad and then sold it before returning to the UK , are the gains exempt from CGT?
3) what is th status of the earnings that were not routed through the UK company and paid directly into his his own offshore account ?
 If the individual had been paid a salary by the company , would the tax position be any different in first two queries ?

Thanks for any guidance


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12th Mar 2012 12:26

Non resident or not

I think things are a little unclear, but here is my 'first stab' at an answer

I assume that the client is UK domiciled, but was Non resident, and is now a UK resident again.

If that is the case, non UK income arising while he was Non Resident would not be subject to UK tax. 

UK source income will be subject to UK tax at all times, so money paid to them from a UK company will be taxable in the UK - regardless of how or where the UK Company earned the money.

The Capital Gain may or may not be taxable, depending on the exact circumstances, but assuming the property was bought while they were Non Resident and then sold while they were still Non Resident and before they returned to the UK then it will not be taxable.  Of course if it was a UK property and their PPR then it would of course not be subject to UK tax.

However, I think from re-reading the enquiry, that there is a subtext about whether the client was genuinely Non Resident and that the fact there was a UK source of income and a UK property (was it available for their use?) may impact on the Residence status.  .

If that is the case then I suggest getting detailed advice is required spelling out all the relevant facts - not just from this forum.  I'm sure that like me, there are others here on AW who would be willing and able to help. 

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By Jmalone
to Tim Vane
12th Mar 2012 20:19

Resident / non resident
Justbtomclarify , it seems that the individual was paid emoluments and salary as a director of the UK based company . He did not have a permanent home orvany other property available to him. He had a property that was bought as a main residence but was converted into flats and put into rental business before he left the UK. After he left the UK , he added to the rental portfolio through director emoluments / salaries received from the UK based company. None of his work was carried out in the UK. How does it impact his non residence status and tax liability. Nhe is non UK domiciled.n

Am looking for expert advice re taxation for non resident directors and non doms . Any contacts , pointe towards experts in this area would be useful

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