Earning Savings Interest Whilst Overseas

I will be leaving the UK this tax year to work full-time overseas in Singapore. I will become a non resident in the UK for the overseas part of this tax year (due to split year treatment) and each subsequent tax year that I remain overseas. Whilst living overseas as a non resident (in both this tax year and subsequent tax years) I will retain savings in a bank account in the UK which will earn untaxed interest. I have two questions: 1. Will I need to complete a self assessment tax return for this tax year (i.e. 2022/23) and each subsequent tax year that I am a non resident and earn untaxed interest on my savings in the UK? 2. Does the amount of interest earned determine whether or not I need to complete a self assessment tax return? 3. Will I need to claim my personal allowance via form R43 for this tax year (i.e. 2022/23) and each subsequent tax year that I remain overseas or can I claim my personal allowance via the self assessment tax return instead?

Hi,
 

You may be required to complete a self assessment tax return for the tax year in which you become non-resident in the UK.  Any interest arising from your savings in the tax years where you are not-resident in the UK, will be taxable in the country in which you are resident for tax purposes.  There would be no expectation for a tax return to be completed in the tax years where you are not resident, however, if you have a UK residential property that you rent out, while not resident in the UK, you would be required to complete a tax return.  There is a self assessment criteria tool available at Check if you need to send a Self Assessment tax return , to help identify if a tax return is required. Thank you.

Thank you for your response. Just a few follow-up questions: (1) I read on the Gov.UK website (https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return) that "you may need to send one [a self assessment tax return] if you have any other untaxed income, such as: some COVID-19 grant or support payments, money from renting out a, property, tips and commission, income from savings, investments and dividends, foreign income". I presume the untaxed interest that I will earn on savings in a bank account in the UK would be classed as "income from savings, investments and dividends". Is this not the case? (2) I also read on the Gov.UK website that "the tax charge for non-residents on investment income arising in the UK is restricted to the amount of tax, if any, deducted at source.". Given no tax is deducted at source does this mean that I am not liable to pay UK tax on any investment income (including untaxed interest that I will earn on savings in a bank account in the UK) whilst a non-resident regardless of how much I earn? (3) I also read on the Gov.UK website that "With the exception of income from property in the UK and investment income connected to a trade in the UK through a permanent establishment, the tax charge for non-residents on investment income arising in the UK is restricted to the amount of tax, if any, deducted at source. If the tax charge is limited in this way, personal allowances will not be given against other income. This restriction does not apply in the overseas part of a split year.". Are you able to let me know what "personal allowances will not be given against other income" means please?

Hi,
 

Income arising from UK banks and building societies would be classed as income from savings, investment and dividends.   Where tax is deducted from interest from a non UK resident's UK bank / building society accounts, this is not refundable.  Where no tax is deducted from these accounts, no tax is payable.  The helpsheet HS300, available at www.gov.uk, advises at point 2, that personal allowances are not permitted for any income, other than for income from property or income from a UK business, where tax has been deducted at source from investment income such as bsavings, investment and dividends. Thank you.

Thank you for your help. When I completed the “Check if you need to send a Self Assessment tax return” questionnaire on the Gov.UK website I answered “Yes, I got more than £10,000 from savings and investments” to the Question “Did you get more than £10,000 from dividends or savings and investments?” - I was then informed that I would need to complete a self assessment tax return. Is this only the case for UK residents and not applicable to non UK residents?

Hi,

This is only for UK residents.

If you are not UK resident you would only consider income in the UK if you are using the remittance basis.

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.

Thank you for your help.