Hi everybody
I was a UK resident for the last 5 years. I moved out on 14th May 2018. I've worked for 47 days in the UK in total during the last tax year (it's because I had a few business trips to the UK after I moved out). My SRT for 2018-2019 result was non-resident in the UK.
My financial advisor suggests that SYT will apply from the 14th of May, but can SYT apply if my SRT result was non-resident?
My understanding is that SYT doesn't apply if my SRT result was non-resident, however even as a non-resident I still have to pay tax for salary income from the days I worked in the UK but the dividends can be treated as disregarded income. Is that correct?
Many thanks
Greg
Replies (16)
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My understanding is if you have left UK, subject to the usual provisos that you seem to have covered, is that you are now non resident and as such allowed certain days in the UK so SYT treatment is not relevant for 2018 19 provided you stay within the guidelines. I agree that any salary from UK employment is taxable in UK and the country you are now residing in but will likely be subject to double tax relief. But this does not necessarily mean that dividends are not taxable in the UK , it will depend on where they come from: for instance if they are from a private UK company that you have a substantial share in then dividends paid out of profits earned before your departure should be declared on tax return and taxed in UK. I am sure that if my interpretation is incorrect it will be challenged hereon.
I'm surprised the SRT resulted in you being non-resident. You might want to check the workings.
Did you skip straight over the other two automatic tests? Where were you staying before you left?
But it's clear that you don't trust your paid advisor's analysis. That's why you're asking in here.
It's not definite (how would I know? I know next to nowt about you), but I think it not unlikely that you pass the 2nd automatic UK test. (In fact, learning from Vile on another thread, I'd go so far as to say I think it likely that you pass that test.)
I think one should avoid using the term "pass" or "fail" in the context of the SRT. Pass indicates success, which if one's desire is to be treated as non-resident might mislead them.
I'd be inclined to use a term like "fall foul of" the 2nd automatic UK test. I think it's highly likely that the OP falls foul of the 2nd automatic non-overseas test. Of course they may have been told that they're resident, but qualify for split year rtreatment, so that they are effectively treated as non-resident from 14 May 2018.
Fall foul of. That's not pedantry - that's a good point well made.
Legislation (para8) does call it "the second automatic UK test" though, so I feel I can do likewise.
Your adviser is an idiot. Sack him, refuse to pay for dodgy advice and appoint a new adviser.