Hi all
A UK domiciled taxpayer moves oversease mid tax year to work for the same employer (Oil & Gas industry, offshore employer with UK PAYE scheme). Employer pays "UK pay" for UK part of the year and 'international pay' when working oversease. UK pay is fully taxed and p60 shows only UK pay. Interantional pay is not taxed (in UK or oversease) and is shown seperately on the payslips. All payments were paid into employee's UK bank account.
Employee has been UK tax resident in previous years, partly resident in relevant year and partly resident in following year.
My understanding on this is that being UK domiciled, and having 'international pay' paid in GBPs, by the same employer, into UK bank account, untaxed anywhere, does not trigger any split year treatment in this case and ALL employement income should now be subjected to UK taxation.
Am I thinking in the right direction?
Also, in the tax return where would you put the 'international pay'? Would it get added with the p60 figure (UK pay) and additional notes provided or is it get notified under foreign income?
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Replies (2)
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For split year treatment to apply the client must meet one of the split year cases (1-8) and depending on if they are an arriver or leaver they must be non-UK resident for the previous or following tax year.
Split Year treatment does not apply to people who are in and out of the country, those people may become dual resident, in which case they could be taxed in the UK as a non-UK resident if their primary residence is determined to be outside of the UK.
Either way you need to consult the DTA/DTA's between the UK and relevant foreign state/s to work out the clients residence and then the tax treatment of their employment income.
