Foreign tax credit when staying over 183 days in a foreign country

Hi HMRC admin, I am a UK tax resident. However, I travel to Japan often and my stay in Japan is expected to exceed 183 days for this tax year. Under the Japanese tax law, I am levied 20.42% of income earned, prorated for the length of my stay in Japan. My employee is a UK entity. Will I be able to claim foreign tax credit to fully deduct the amount paid for the Japanese tax from my UK income tax? Best regards, DR

Hi,

As out of the UK for over 183 days, you may not be UK tax resident. please refer to:

RDR3 Statutory Residence Test

Tax on foreign income

Thank you.

Hi, Thank you for your reply. Regarding the Statutory Residence Test, if I stay at least 91 days in the UK, I will not meet any of the automatic overseas test. I plan to have a home in the UK for at least 91 consecutive days and stay in it for at least 30 days. I will also not have home elsewhere, so I will satisfy the second automatic UK test. Based on the above criteria, I will be a UK tax resident, but please let me know if my understanding is incorrect. Best, DR

Hi,

Your interpretation is correct.

Thank you.

Hi, Thank you. If that is the case, will I be able to claim foreign tax credit to fully deduct the amount paid for the Japanese tax from my UK income tax? Best, DR

Hi,

If it is Japanese Income Tax, yes.

Thank you.