Tax Status

Hi. I am a UK Citizen and an Australian Permanent Resident. Due to recent personal loss, I've left the UK permanently for Australia as of October 24. Up until the 1st of Jan 2024 I will remain a PAYE employee for a UK company however after this period will become a consultant. I have a house in the UK that will be leased from roughly the same date (have lodged form NR1). I have a SIPPs fund that will cease to receive contributions once I stop being PAYE. What are my obligations to HMRC and what are my next steps? I had hoped it would be as "simple" as being an Australian Tax Resident from the 1st of January but fear that might not be the case. I had hoped to appoint a UK or Australian tax advisor before leaving however struggled to find anyone interested in my (meagre) business. Thanks.

Hi,
Please refer to Tax on your UK income if you live abroad
Thank you.

Not HMRC...you will need to complete a SA form for 24/25, including worldwide income to date of leaving, including salary, tax paid etc, and also property income/expenses from that date. You will also need to complete residence pages as part of that return, claiming split year treatment if appropriate. Then for 2025/26 you will complete a SA return claiming full non residence and including UK income (property income and expenses, tax credit on any mortgage etc etc) and continue to do that annually. For the consultancy side, if they are paying through payroll you should apply for a NT code, if they are paying gross outside of PAYE no need. Each year you will need to give copies of your UK returns to an Australian accountant. This process is what anyone leaving the UK should do in your circumstances. No need to do a P.85 as you will be completing a SA return for 24/25, i,e the year you have left. Talk to other expats in Australia as to what they do/who they use in UK/Australia.

Thanks Clive, that's really useful. I assume that everything you're posting is based around satisfying the ATO as I rang up HMRC from Aus last week and basically got told I don't have to do anything their end and that, as I'd already left the country before starting to operate as a sole proprietor, tax would be calculated in Australia (I'm being paid gross). Same for the rental, declare to ATO with no involvement from HMRC, particularly as I've already received 'permission' from HMRC to rent my property as a non-resident landlord so will be receiving rent from property management gross. Do you think what I've written above removes the necessity to do a UK SA or would it be required from an ATO perspective for 'proof of income'?

Hmmm...youve gotten semi "duff" advice. Its OK re the sole trader situation, that would be correct on basis no UK earnings prior to departure, so effectively Australian self employed only. UK rental income property ALWAYS requires a UK return, even whether paid gross via NRL1 or not, it is liable FIRST in the UK, regardless of which country you go to, which means that you then also need the residence pages also as you need to complete a UK return as normal for all of your UK affected position, which includes non residence. Even if property profit is less than personal allowance it is liable here and needs a return, thats the law. What I said stands...deal with many many people in your situation, being ATO doesnt change UK requirements.

,,,UK/Australian DTA...Article 6 - Income from real property 1. Income derived by a resident of a Contracting State from real property may be taxed in the Contracting State in which the real property is situated. For "may" read "is liable in and will be taxed in with tax credit in Australia!...may means "will be" not "might be" in DTA legal language...which means HMRC can and will tax it, but you get a personal allowance as normal in the UK and can either claim expenses and mortgage interest (tax credit) or flat rate allowance (but no mortgage interest tax credit)...so for all intents and purposes you need to complete SA returns annually for the UK, including residence (non) pages.