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Posted Mon, 29 Jul 2024 15:16:56 GMT by Lan A
Hi, I am a UK resident, non-domicile. I will probably receive income as a sole trader in another country, and will pay taxes there. The tax rate in that country is lower than in Scotland, where I live. The country and the UK have a double taxation agreement. I wish to transfer a part of this income from my foreign business bank account to my British account for personal use. So, I want to understand how this will work tax-wise. Is the following correct? 1. I will need to pay tax in Scotland on a remittance basis. 2. In Self-Assessment, I can ask for a tax return. And I will get back the amount of tax paid in a foreign country for the income transferred to the UK. Thank you!
Posted Fri, 02 Aug 2024 09:51:31 GMT by HMRC Admin 20 Response
Hi,
As a UK resident, who is not domiciled, you are taxed in the UK on the 'arising' basis on your world-wide income.  
If there is a tax treaty between the UK and the other country, then self employment (sole trader) income is taxable only in the UK (unless you are physically in the other country at the time the self employment is carried out).  
You should request a certificate of residence from HMRC (How to apply for a certificate of residence to claim tax relief abroad) and send it to the relevant overseas tax authority, to have your income paid gross.
But, if you choose to use the remittance basis, as you are not domiciled here, then you need to declare the remittance basis in your self assessment tax return, showing the amount of unremitted income in box 34 of SA109, with a breakdown of the income in box 40.  (Residence, remittance basis etc (Self Assessment SA109)).  
If you bring the income into the UK in a later tax year, you will have to declare it and pay tax on it in that later tax year.
Have a look at the guidance at RDR1 (Residence, domicile and the remittance basis: RDR1).
Thank you.

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