Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 22 Jul 2022 15:45:39 GMT by Expatquestions Confused
Hi, Last year I left the uk after being in the UK from April 6th 2021 until August 1st 2021. This makes me tax resident in the UK for 2021/2022 as per the SRT (statutory residence test). For the remainder of the tax year, August 1 2021 until April 5 2022, I was working full time in Dubai for a Dubai based employer. I cut ties with the UK as this was intended to be a permanent move. As per the DTA (UK UAE) I was “treaty resident” in Dubai and so exempted from UK income tax on the salary earned whilst there. However due to a change in circumstances, I permanently returned to the UK on July 10th 2022 to take up UK employment. I have 2 questions: (1) Will this return to the UK in 2022 impact my ability to apply UAE treaty residence in the 2021/2022 tax year even if I meet the treaty ties tests making me a confirmed treaty resident of the UAE during that 2021/2022 tax year? (2) Would I be correct in assuming that ONLY my UAE income earned from April 6th 2022 until July 10th 2022 (i.e. tax year 2022/2023) is subject to UK income tax? I would again be tax resident in the UK as per the SRT rules for 2022/2023 but this time I have calculated that I do not meet the DTA “ties tests” for “treaty residence” for the UAE in this tax year unlike in the 2021/2022 tax year in which I did meet the requirements. Please confirm my understanding is correct. Thanks!
Posted Mon, 25 Jul 2022 13:53:39 GMT by HMRC Admin 17

Hi,
 
On the basis of the information provided, SRT would apply for both 2021/22 and 2022/23.

You would therefore only be liable to UK tax on your UK earnings for the periods 6/4/2021 - 1/8/2021, and 
from 10/7 2022  onwards.

You can check the position by using HMRC's new 'Check Your UK Residency Status' tool.

See link:

Which tax year do you want to check your UK residence status for?     .


Thank you.
Posted Mon, 25 Jul 2022 15:09:07 GMT by Expatquestions Confused
Hi "HRMC ADMIN 17", Can I further elaborate to ensure I get the correct response: - I am SRT in both tax year: (2021-2022) and tax year (2022-2023) - I was NOT resident under the SRT in the UK in tax year (2020-2021) or for 9 years before this. - I cannot apply "Split Year" treament because I was not resident in the UK in tax year (2020-2021) - A full tax year was NOT spent as non UK resident abroad in the UAE because I returned to the UK they very next tax year. - I am relying solely on "Treaty Residence" to claim tax exemption on UAE earned income from 01/08/21 to 05/04/22 - I do not meet the tests to claim "Treaty Residence" to claim exemption on UAE earned income from 06/04/22 to 10/07/22 because of the very short period of the tax year this encompasses. When looking at SPLIT YEAR treatment, in order to apply SPLIT YEAR treament you must have been resident for a full tax year in the UK in the year PRIOR to splitting the year, (I was NOT tax resident in the UK in year 2020-2021 so I cannot apply split year treament). Also when looking at Split Year treament, another requirement is to spend a full tax year abroad when again I have not done as I have returned in the next tax year. Thus SPLIT YEAR cannot apply in my case. The only posibility I have to get tax exemptions is through TREATY RESIDENCE as part of the UAE-EK Double Tax Agreement. So basically the main question is: When applying for TREATY RESIDENCE in the UAE to exempt my UAE earnt income in tax year 2021-2022 (01/08/21 to 05/04/22), is it a requirement to subsequently spend a full tax year abroad (i.e. I should have spent tax year 2022-2023 in the UAE) OR does it not matter that I came back to the UK in the tax year following the year in which TREATY RESIDENCE was claimed? Essentially do TREATY RESIDENCE tax exemption claims require a full tax year be spent abroad such as is the case for SPLIT YEAR treament or are the two concepts completely different?
Posted Tue, 26 Jul 2022 14:06:02 GMT by HMRC Admin 17

Hi,
 
Please refer to further guidance at :

RDR3: Statutory Residence Test (SRT) notes   .


Thank you.
Posted Tue, 26 Jul 2022 15:54:58 GMT by Expatquestions Confused
Hi “HMRC Admin 17” and other admins, I have been through those SRT notes in great detail and still sim unable to find an answer to the following question: If I claim treaty residence in the UAE for the second half of tax year 2021-2022 (01/08/22 - 05/06/22), does coming back to the UK half way through tax year 2022-2023 cause my claim for treaty residence in tax year 2021-2022 to be void? Essentially is it a requirement to spend a full tax year abroad after claiming “treaty residence”? To claim split year treatment a full tax year abroad would be required but there is nothing written in the legislation for what happens when treaty residence is claimed? I would appreciate if HMRC could give a clear answer on this.
Posted Wed, 27 Jul 2022 11:05:01 GMT by HMRC Admin 17

Hi,
 
If you are claiming relief under double taxation rules, it only applies to the country that the treaty is with.

If you then move to another country, including returning to the UK, then the claim under the DTA ends
the day you are tax resident in the other country  .

Thank you.
Posted Wed, 27 Jul 2022 12:04:19 GMT by Expatquestions Confused
Hi HMRC, thankyou for your reply. So to confirm and in conclusion then: The fact that I completed the remainder of the tax year (2021-2022) in the UAE and returned to the UK in the "NEXT" tax year (2022-2023) has absolutely no impact on my claim to DTA Treaty Residence in the UAE for the purpose of UK tax exemption on income earnt in the UAE from 01/08/21-05/04/22? That salary earnt in the UAE from 01/08/21-05/04/22, whilst it needs to be declared in self assessment with the DTA quoted, is totally exempt from UK income tax in the end.
Posted Thu, 28 Jul 2022 12:55:32 GMT by Expatquestions Confused
I would appreciate if HMRC can confirm the above as the question has still not been clearly answered.
Posted Thu, 28 Jul 2022 12:59:54 GMT by HMRC Admin 25
Hi Expatquestions Confused, 

That is correct. 

Thank you. 

 
Posted Thu, 15 Sep 2022 18:15:20 GMT by AnotherConfused Expat
Hello HMRC Admin 25. Just double checking: If a UK resident taxpayer moves from full time UK employment to full time Dubai employment for 1 calendar year - say November to November - he will NOT be taxed on any of his Dubai income if for that period he is DTA Treaty Resident in Dubai?
Posted Fri, 16 Sep 2022 06:19:21 GMT by Lost InGlobe
Hello Admin, Income isre not taxed in UAE, therefore the income of the OP in UAE is still taxable in UK if he is UK resident. That what I was told in this forum, Could you please clarify? Thank you
Posted Tue, 20 Sep 2022 10:53:55 GMT by Lost InGlobe
Hello Admins, Could we have answers to our queries, please? Thank you
Posted Tue, 20 Sep 2022 14:49:07 GMT by HMRC Admin 17

Hi,
 
That is correct .

Thank you.
Posted Tue, 20 Sep 2022 18:31:25 GMT by Lost InGlobe
Hello, Thank you for your response;it is not clear, however, if it were a response to my question or "AnotherConfused Expat 's. Thank you
Posted Wed, 21 Sep 2022 11:47:26 GMT by HMRC Admin 19
Hi AnotherConfused Expat,

This would depend on tax residence status. You can see guidance here:

Tax on foreign income

Thank you.
Posted Thu, 22 Sep 2022 13:20:36 GMT by HMRC Admin 25
Hi Lost InGlobe,

As you are stating you were UK tax resident for the year, the foreign income needs to be declared to the UK and tax paid on it. 

Thank you 

 
Posted Fri, 23 Sep 2022 07:29:33 GMT by AlsoConfused
Hi HMRC Admin Your clear advice to the original poster, Expat Questions Confused, is that for the period he was DTA Treaty Resident in Dubai he does NOT have to pay UK income tax, i.e. the period 01.08.21 to 05.04.22. In other words, the normal split year rule (where the tax payer has to spend 1 complete UK tax year away) does NOT apply if the tax payer has DTA Dubai Residency for the period he is away. So it follows that if AnotherConfused Expat also obtains DTA Dubai Residency for the period 01.10.22 to 01.10.23 then his/her Dubai income for that period will ALSO not be taxed in the UK. But your subsequent advice to Lost InGlobe is that AnotherConfused Expat WILL have to pay UK tax because Dubai has a 0% income tax rate. Please could you urgently clarify this very important point. The HMRC texts you refer us to do not specifically answer the question. Thank you
Posted Mon, 26 Sep 2022 13:28:54 GMT by HMRC Admin 17

Hi
 

AlsoConfused ,
 
It depends on the actual tax residence for the year and each person will be dealt with on their own personal circumstances so
comparisons should not be made   .

Thank you.

You must be signed in to post in this forum.