Obtain the latest information on tax planning for property, buy to lets, working overseas, non-resident and offshore tax and much more - see site for more info now!Obtain the latest information on tax planning for property, buy to lets, working overseas, non-resident and offshore tax and much more - see site for more info now!
HomeNon UK DomiciliariesFree Tax Help2 Tax Experts Online!Online Tax ToolsPractitioner ZoneSearch WebsiteJoin TodayMember Area

Paypal subscribe

Not a member? Join today for free tax planning
 most popular
Free Tax Books
Amazon.co.uk Books
Our Latest Articles
Our Latest Q&A's
Members Downloads
Practitioner Zone
Online Tax Calculators
Free Offshore Tax Book
Join Today - Immediate Access!
 Our Tax Experts
Benefits of Membership
Our Experts
 Tax Help
Free Tax Help
Free Tax Return Help
Latest Tax Q&A's
Gold Members Resources
 Tax Planning
Capital Gains Tax
Corporation Tax
Income Tax
Inheritance Tax
Stamp Duty
 Non UK Domicile Tax Planning
Non UK Domiciliaries
Non Dom Tax Q&A's
 Non Resident Tax Planning
Non UK Residents
Non-Resident Tax Book
Non Resident Tax Q&A's
Statutory Residence Test
 Company Tax Planning
Corporation Tax Articles
Corporation Tax Q&A's
Company Tax Calculators
 Offshore Tax Planning
Offshore Tax Planning
Double Tax Treaties
Emigration
Tax Havens
Working Overseas
 Tax Planning Questions and Answers
Capital Gains Tax Q&A
Corporation Tax Q&A
Income Tax Q&A
Non Domicile Tax Q&A
Non Resident Tax Q&A
Inheritance Tax Q&A
 Tax Planning With Offshore Companies
Offshore Companies
Offshore Companies Q&A
Free Offshore Tax Guides
Form an Offshore Co.
ATED for Companies
 Property Tax Planning
Property Investment
Overseas Property Tax
Private Residence Relief
 Other Tax Planning
60% Effective Tax Rate
Entrepreneurs Relief
Latest Articles
LLP Articles & Q&A
Old Articles
Rich/Famous Tax Planning
 Your Membership
Member Profiles
credit cards accepted

Recent Tax Q&A's

To view more tax Q&A's visit the Archive Directory

• Non Domiciles - Royalty Income
• Settlor interested trust - resident but non-dom
• Becoming UK Non Resident
• Sale of refurbished investment properties
• non resident landlord scheme
• Interest Balance on Mixed accounts as of 5/4/08
• P85 and UK/NZ Residency
• How to claim double tax relief on UK pensions
• capital gains tax and non-dom
• Remittance basis, bed and breakfast
• Personal allowance for non residents after 2010
• UK Dividends collected in a Cypriot Company
• Non-dom £30,000 charge
• Cyprus or North Cyprus
• tax implications on inheriting half a house
Search Tax Q&A Directory









home | Working Overseas

Working Overseas

If you are working overseas either as a permanent move or under a short term secondment you should carefully consider the tax planning opportunities available to you.

Many people look to go and work overseas. One of the key considerations will be achieving the tax advantages that go with working overseas.

What are the tax advantages

Working Overseas Book The main tax advantage is that if you can get classed as non UK resident and non UK ordinarily resident you will be exempt from UK income tax on your overseas salary income. If you're working in a nil or low tax environment such as Dubai this means you can receive your salary totally tax free.

Other tax benefits of establishing non UK residence status include:

  • Being able to receive UK bank and building society interest free of income tax. By submitting a form R43 available from the Revenue website you can elect to reclaim tax that was wrongly deducted on interest from the UK as a non UK resident and non UK ordinarily resident individual.
  • Being able to receive UK dividends free of any UK withholding taxes
  • Only being subject to UK tax on bank interest and dividends to the extent that tax is deducted at source (ie effectively nil) for the tax years after you emigrate
  • Being exempt from UK capital gains tax on any assets that you acquire after you leave the UK. When you sell assets that you already owned when you left the UK you will usually be subject to the five year non residence requirement if you want to avoid CGT.

Residence

There is no firm guideline laid down in the tax legislation as to when an individual is and is not UK resident.

The courts have traditionally given Residence its ordinary dictionary meaning.

Therefore they take the view that to reside somewhere means to 'dwell permanently or for a considerable time, to have ones settled or usual abode, to live in or at a particular place.

In this respect the courts/commissioners could look at an individuals ties to the UK, the regularity and length of visits to the UK,past and present habits of life and freedom of attachments abroad. As such if an individual goes to work overseas and has no real visits to the UK in the period since departure they would clearly be non UK resident. If on the other hand they retained a UK property and came here for around 5-7 days per month and lived with close family it is likely they would be UK resident.

In fact though this strict legal position is modified by Revenue practice/concessions.

However the strict legal position is always worth bearing in mind because the Commissioners can and do ignore the Revenue practice if they choose to.

Revenue Practice

If you leave the UK to work full-time abroad under a contract of employment, you are treated as not resident and not ordinarily resident if you meet all the following conditions:

  • your absence from the UK and your employment abroad both last for at least a whole tax year
  • during your absence any visits you make to the UK - total less than 183 days in any tax year, and - average less than 91 days a tax year. (The average is taken over the period of absence up to a maximum of four years. Any days spent in the UK because of exceptional circumstances beyond your control, for example the illness of yourself or a member of your immediate family, are not normally counted for this purpose.)

If you meet all these conditions you are treated as not resident and not ordinarily resident in the UK from the day after you leave the UK to the day before you return to the UK at the end of your employment abroad. You are treated as coming to the UK permanently on the day you return from your employment abroad and as resident and ordinarily resident from that date.

If an individual has met ALL these conditions he is then entitled to claim Non UK resident and non UK ordinary resident status from the day following departure from the UK for full-time work abroad in accordance with the above. That status continues as long as the individual continues to meet all of these conditions.

As soon as you cease to meet these conditions in a tax year you would therefore not then be entitled to the concession.

It's therefore essential then that in order to claim the benefit of the concession (essentially to expedite your non residence application and to prevent the strict legal position being initially considered) you are:

  • working overseas under a full time contract of employment

  • overseas under the contract of employment for at least a full tax year

  • able to meet both the 90 and 183 day requirements

If you're not the Revenue will usually be quick to point out the concession does not apply.

Full time

This is not defined and there is no minimum number of hours specified. However the Revenue regard a working week of 35-40 hours as full time and can accept lower hours if its reflected in local conditions. Several part time jobs can also constitute full time work.

If you own a company there is nothing to prevent you from establishing non UK residence be drafting a contract of employment for an overseas subsidiary. Providing you then meet the above conditions the fact that you are a shareholder in the company would not prevent you establishing UK residence. Clearly you'd need to be an employee although you'd need to be able to show that there was a genuine full time employment.

When can the conditions be breached?

There are lots of circumstances where the conditions can be breached aside from the obvious breaches of exceeding the 90 day requirement or not ensuring the employment contract lasted for a complete tax year.

The Revenue have stated that '...If there is a break in full-time employment, or some other change in your circumstances during the period you are overseas, we would have to review the position to decide whether you still meet the conditions...' and '...If at the end of one employment you returned temporarily to the UK, planning to go abroad again after a very short stay in this country, we may review your residence status in the light of all the circumstances of your employment abroad and your return to the UK...'

You would also need to ensure that there were no UK duties other than 'incidental' UK duties. Incidental has been strictly construed for this purpose and for example a pilot whose flights required occasional stop overs in the UK was held to have more than incidental UK duties.

You would also need to ensure that your employment was full time. If for example you had a significant period away from the office in the UK it is likely the Revenue would argue that you were not in full time employment. Therefore there are cases where the Revenue have challenged individuals having 80 days spent in the UK in a tax year to visit aged relatives etc on the basis that they were not in full time employment.

You may find the following of interest:

  • Reducing income tax for employees working overseas
  • Checklist:Going to work overseas
  • Traps to avoid when you're working overseas
  • Establishing non residence when you work overseas compared with leaving the UK permanently
  • Offshore teleworking
  • National Insurance when you work overseas
  • What is the foreign earnings deduction?
  • Non Residence as an employee
  • Avoiding double tax if working abroad
  • Tax on civil servants working abroad
  • How to reduce tax if you're working overseas
  • Exercising share options after you leave the UK
  • Can I be employed by my overseas company?
  • Receiving a bonus after you are non resident

    Subscribe now for income tax, capital gains and inheritance tax savings

    About Our Editor

    Lee Hadnum
    The Editor of our website is Lee Hadnum. Lee is a rarity among tax advisers having both legal and chartered accountant qualifications. After qualifying a prize winner in the Institute of Chartered Accountants exams, he also went on to become a chartered tax adviser (CTA).

    He worked in Ernst & Youngs Entrepreneurial Services department for a number of years before setting up his own tax planning practice. He is now a full time tax author.

    Google+

    WPR Tax Books
    FREE DOWNLOAD -  Tax Planning For Entrepreneurs Relief 2014/2015FREE DOWNLOAD - Tax Planning For Entrepreneurs Relief 2014/2015
    16/07/2014
    There are a number of hoops to jump through in order to claim Entrepreneurs relief and reduce your rate of CGT to 10%. In particular you need to ensure that the assets sold are "qualifying assets . . . keep reading

    FREE DOWNLOAD -  Inheritance Tax Planning Handbook 2014/2015: Strategies & Tactics To Save Inheritance TaxFREE DOWNLOAD - Inheritance Tax Planning Handbook 2014/2015: Strategies & Tactics To Save Inheritance Tax
    02/07/2014
    Inheritance tax is a particularly nasty tax as it's a tax on your capital that you've accumulated from your after tax earnings. In this book we look at some of the top ways you can legally reduce your . . . keep reading

    FREE DOWNLOAD - Tax Planning With Trusts 2014FREE DOWNLOAD - Tax Planning With Trusts 2014
    23/06/2014
    Trusts offer a highly attractive way to pass wealth onto other family members in a tax efficient manner. In this book we look at when and how both UK and offshore trusts can be used to reduce UK inco . . . keep reading

    FREE DOWNLOAD - E-Commerce Tax Planning 2014/2015FREE DOWNLOAD - E-Commerce Tax Planning 2014/2015
    13/06/2014
    If you're trading via a website or are involved in other e-commerce activities there are a number of tax planning opportunities available. In this book we look at tax planning for all types of e-comm . . . keep reading

    FREE DOWNLOAD - CGT Planning For UK Property: 2015 & BeyondFREE DOWNLOAD - CGT Planning For UK Property: 2015 & Beyond
    06/06/2014
    Over recent years there have been changes to the capital gains tax (CGT) treatment of UK residential property held by companies. Further changes are to be made from 2015 and 2016 which will have a mas . . . keep reading

    FREE DOWNLOAD - Tax Planning For The Statutory Residence Test: 2014/2015FREE DOWNLOAD - Tax Planning For The Statutory Residence Test: 2014/2015
    21/05/2014
    The new Statutory Residence Test ("SRT") applies from April 2013 and aims to provide a comprehensive method of clearly establishing when an individual will (and won't) be UK resident. In thi . . . keep reading

    FREE DOWNLOAD - Tax Planning For Property Developers: 2014/2015FREE DOWNLOAD - Tax Planning For Property Developers: 2014/2015
    07/05/2014
    If you are trading or are planning to trade or develop property, a key consideration will be reducing the amount of UK tax charged on the profits from the development. In this guide we look at how p . . . keep reading

    FREE DOWNLOAD - Buy To Let Tax Planning In 2014/2015FREE DOWNLOAD - Buy To Let Tax Planning In 2014/2015
    02/04/2014
    Buy To Let ("BTL") landlords have to consider Income tax, Capital gains tax, Inheritance tax and Stamp duty land tax on their property holdings. In this book we look at tax planning techni . . . keep reading

  • Full time overseas work under the statutory residence test for offshore oil worker - USERNAME: aquablue - 10/10/2013
    Tax Question: Hello, I have noticed that one requirement is employment overseas. As freelance worker in the offshore oil industry there is no regular work pattern, contracts run for 3 sometimes 8 weeks at a time, 3 or 4 months without a contract during the winter are not unusual. So although the total yearly hours worked are quite high, 12/15 hrs a day 7 days a week the days worked are quite low. The SRT seems to put emphasis on a normal weekly work pattern and would possibly exclude this sort of employment from expat status. Is this correct? . . . keep reading
    Free Tax Books For All Members

    worldwide capital gains tax calculator 2014

    Worldwide corporation tax calculator 2014

    Personal tax calculator

    Inheritance tax planning handbook 2014/2015

    Tax planning with trusts 2014

    CGT planning for 2015


    Tax Planning For The Statutory Residence Test: 2014/2015

    Non resident and offshore tax planning

    The world's best tax havens

    Working overseas - the complete tax planning guide 2014/2015

    Tax planning for the family home

    IHT planning for non UK domiciliaries

    Tax planning with offshore companies and trusts

    Tax planning for property investors

    Tax Planning For Fiscal Nomads & Perpetual Travellers

    How to avoid capital gains tax 2013/2014

    tax planning for company owners

    Tax saving tactics for non-doms


    worldwide tax calculator

    Gold members area


    Using a company tax calculator




    EU Tax Calculator


     TESTIMONIALS
    Here's what our members are saying ...
    "I joined the site after reading an offshore tax guide and was certainly not disappointed. The practical and 'to the point' tax planning has already saved me a considerable sum. I'd recommend this website to anyone."
    Jerry Brown, Edinburgh


    "From my experience, the advice offered by the team at WPR is second to none and compliments what is normally provided by a high street accountant and offers members quality analysis and advice on complicated tax situations both on and offshore.

    I regularly receive a blank look and "I don't know about that" with regard to more imaginative questions and a visit to this site helps me move on. thank you."
    Peter Jones, Germany


    "I've saved £5,659 in CGT by using this site to double check my accountants advice. My wife has also identified further income tax savings of over £2,000 as result of the property tax articles. In our case it's well worth the £10 membership fee."
    Derek Bailey, Birmingham


    I must thank you for the most informative reply to my enquiry. It is so extensive, I intend setting an evening aside to absorb it all.

    Again, thank you for a most useful website.
    RB, UK


    "Well written reports that are clear and insightful. I look forward to reading them every week!
    Natasha Foude, France


    "I have to say your web site is by far the best prepared and most informative that I have seen."
    Elsa Budding, Newcastle


    "I'm planning my emigration and the offshore reports are exactly what I'm looking for. I'll definitely be renewing!"
    Sarah Mather, Reigate, Surrey.


    "The property tax advice service was excellent, and I'd have no problems recommending it to anyone. I received my answer within 1 day and was very pleased with the response
    Robert Saunders, Leicester
     Other Tax Planning
    Completing Tax Forms
    Old Articles