# Considering UK to Dubai. Advice needed on money/taxes



## Tiberius1210 (Jul 27, 2012)

Hi,

I'm giving an excellent job offer in Dubai, from a UAE company, serious consideration. I'm concerned about taxes in the UK making it less worthwhile. I'm completely clueless to the mechansims employed by expats so would appreciate any advice.

Initially I plan to move out alone and then 6 to 12 months later my wife and two children will join me. Currently my wife claims disability allowance and incapacity benefit, if it makes any difference.

Whilst alone in Dubai I plan to send enough home to cover the bills/debts/mortgage etc and to maintain the family. Will I have to pay uk tax on this? 

Once my family move out, we'll either rent the house out or sell it. If we let it out we will have to top up the rental income to meet the mortgage payment and also continue to pay remaining debts. Again, will this money going back into uk be taxable?

Ultimately the aim of the move is to save some money with a view to return to the uk in 5 years or so. How would I be able to access/move our savings most effectivly to reap the maximum return, from a minimising tax point of view, on moving back the uk?

I understand my residential status in the uk plays a pivotal role in this. How would you play it?

I'm sorry to ask but my research brings up so many conflicts. This move feels like a huge leap and will only be worthwhile if I don't get stung by tax back in the UK.

Many thanks,

Tib1210


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## claredoc (Aug 24, 2011)

You wouldn't pay tax on any money being transferred back to UK as the funds were earned in UAE. 

For tax purposes, it all depends on WHERE the money is actually earned as to whether you will pay tax on it.


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## yoplu (Apr 24, 2012)

claredoc said:


> You wouldn't pay tax on any money being transferred back to UK as the funds were earned in UAE.
> 
> For tax purposes, it all depends on WHERE the money is actually earned as to whether you will pay tax on it.


It depends on where the money is earned but it also depends mainly on your tax domicile. You would need to be classed as non-domiciled in order not to pay UK taxes on your UAE income. eg if you moved here for 4 months, got paid and didnt like it and then moved back to UK you would be liable to pay tax on that income.

They are making the tax rules stricter in the UK so it may be only a maximum of 16 days allowed in the uk per year before you become partly liable for taxation. 

Talk to PIC De vere, Globaleye, or AES Finance. They are the main 3 out here and its their bread and butter business advising on this


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## sarah# (Apr 29, 2012)

Claredoc is right, sending funds back to the UK doesn't make them taxable.

To have your income non-taxable in the UK you need to break residency. The rules are changing from next year but as they currently stand if you leave the UK now you have to be working in Dubai until at least April 2014 to become non-resident and so not subject to tax on your employment income in the UK.

This is because you have to be out of the country for at least a full tax year (so April to April) to become non-resident. If you meet this test by concession HMRC should let you become non-resident from the date you leave so your employment income earned in Dubai will not be taxable in the UK. Your visits to the UK must be limited however to break the residency.

If you return before April 2014 you will not break residency and all of your income earned in Dubai will be subject to tax in the UK. You will have to self-assess the tax. 

Bear in mind also that even if you break residency your rental income will remain subject to UK tax but you can deduct allowable expenses such as the mortgage interest (not the capital repayments) and any maintenance or prof fees in relation to your property. You will have to register as a non-resident landlord.

You should fill out a form P85 which tells HMRC you are leaving the UK and you can also request and in year repayment in relation to your employment income - if you become non-resident you will most likely get a partial refund of your PAYE depending on circumstances.

Hope this helps.


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## sarah# (Apr 29, 2012)

Just re-read your post and see that you are going for 5 years you should become non-resident from the day you leave assuming you won't spend months holidaying in the UK? 

As I said in the last post you won't pay tax just for sending the money back to the UK so don't worry about that.


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## suzimack (Nov 29, 2011)

I've filled in all the forms and registered myself as non-resident landlord. No problems there, but I'm just wondering (out of curiosity) how would HMRC know when/how you have spent time in the UK, if you are only visiting (I.e. not working)? Am I right in saying you can be back less than 3 months (total) without problems? (I only intend being back for maybe a week at a time max, but would just be interested to know!)


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## sarah# (Apr 29, 2012)

Your days spent in the UK must not exceed an average of 91 days per tax year worked out over a maximum average of 4 years. A day is counted if you are physically present in the UK at midnight. You don't have to be working in the UK to count the days just be present. You are self-assessing your tax and HMRC are unlikely to keep tabs on you unless you are a massive earner even then it's unlikely. If they did investigate you though they could look at border control to see days present in the UK.

The rules are changing from April 2013 though so you'd need to check again. 

You should also note that if you are working in the UK even as a non-resident you can quickly become liable to tax on that income earned in the UK (your money earned outside of the country would not be taxed just your UK earned). Are you expecting to work in the UK?


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## sarah# (Apr 29, 2012)

Ps don't worry I am not from HMRC realised that last question was a bit of an interrogation! Just trying to help!


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## yoplu (Apr 24, 2012)

suzimack said:


> I've filled in all the forms and registered myself as non-resident landlord. No problems there, but I'm just wondering (out of curiosity) how would HMRC know when/how you have spent time in the UK, if you are only visiting (I.e. not working)? Am I right in saying you can be back less than 3 months (total) without problems? (I only intend being back for maybe a week at a time max, but would just be interested to know!)


Welcome to the world of UK tax returns. I'm a non-resident landlord and have to do a tax return in the UK every year because I own a property there. 
Not sure if you have done one before but they do collect a lot of info from it, including how many days you were in the UK.
The onus is on you to report the figure accurately.


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## Tiberius1210 (Jul 27, 2012)

Many thanks for all the replies. 

I won't be working on my visits back to the uk. Will the fact that my wife and kids will still be living in the uk prevent me from becoming a non resident in the first year until they join me? Does anybody know how much the rules will be changing, particularly in respect to days spent in the uk? 

Thanks again


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## M3red (May 29, 2012)

How can you ever move back to the uk without getti g nailed for tax?


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## Kawasutra (May 2, 2011)

I see, the double income tax agreement between the UK and the UAE seems totally different to what we in Germany have.
If I had the same scenario I had to pay full taxes as long as my family is living in Germany.
And meanwhile as long as I have a toothbrush in Germany that belongs to me I have to pay taxes because we have a new agreement in place thats really worse....!
Government needs money, big way.


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## sarah# (Apr 29, 2012)

With regards to coming back to the UK so long as you broke residency you will only be taxable on income earned from the day you return so it's not so bad. Germany sounds worse!


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## M3red (May 29, 2012)

sarah# said:


> With regards to coming back to the UK so long as you broke residency you will only be taxable on income earned from the day you return so it's not so bad. Germany sounds worse!


Can anyone confirm this? I want to know the position if I come back to the uk for whatever reason!


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## vantage (May 10, 2012)

M3red said:


> Can anyone confirm this? I want to know the position if I come back to the uk for whatever reason!


My understanding is that once you are officially recognised as non-resident, you stop paying tax the day you leave.
When you become resident, you start paying tax again the day you arrive.

However, i believe you need to be non-resident for a full tax year to prevent them clawing back.


You are also likely to be due a tax rebate if you pay be PAYE, as your tax is calculateed across 12 months earnings, which may push you into a high tax bracket, and you only worked for 6 (for example) totalliing a lower tax bracket, so you will have overpaid.


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## zovi (Jul 5, 2012)

http://www.hmrc.gov.uk/incometax/tax-leave-uk.htm

This might help


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## nikkisizer (Aug 20, 2011)

M3red said:


> How can you ever move back to the uk without getti g nailed for tax?


Hello M3red,

Get an Accountant with experience in this area and preferably based locally 

Residency is a very complex issue, HMRC are making it more and more difficult to escape UK tax.

I have come across many unfortunate people who have either been wrongly advised or read threads on forums and assumed that that post will apply to them also.

It is not as simple as breaking or not breaking residency, each individuals circumstances will be different meaning different rules may apply.

Seek professional advice, it is worth the charge to save your finances in the long run!


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## zovi (Jul 5, 2012)

nikkisizer said:


> Hello M3red,
> 
> Get an Accountant with experience in this area and preferably based locally
> 
> ...


Or you can also call HMRC and they will happily discuss it with you  as they did me.. 

But of course they can't help with everything ...


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## thickodicko (Nov 13, 2012)

i've just had a conversation with the HMRC with this - I wouldn't exactly say any of them gave me any feeling that they actually knew what they were talking about...

Instead they have referred me to a document called HMRC6 which details my position... from the looks of it, as long as you are out of the country for a full tax year, you don't need to concern yourself with income tax on income earned abroad:

*8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become
not resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at
least a whole tax year
• you have actually physically left the UK to begin your employment
abroad and not, for example, to have a holiday until you begin your
employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the
period of absence up to a maximum of four years.

(this is the same as if you were self-employed)*

However, I still couldn't find anyone who could state what I do about declaring income from a rental property in the UK?

From what I can gather UK assets are subject to UK tax no matter where you live


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## claredoc (Aug 24, 2011)

We have rental income from our home in UK and complete a self assessment form every year declaring the income. Only way you can do it.....


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## nikkisizer (Aug 20, 2011)

thickodicko said:


> I still couldn't find anyone who could state what I do about declaring income from a rental property in the UK?
> 
> From what I can gather UK assets are subject to UK tax no matter where you live


You will need to register for self assessment if you have not done so already and file a tax return declaring your rental income from UK property.

Rental income from UK property is subject to UK taxation regardless of whether you are classed as UK resident or not.


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## Renoir21 (Nov 5, 2012)

Hello all,

I'm moving out to Dubai between mid April and May. Having read the previous posts I wont be in Dubai for the beginning of April 2013 does this mean my earnings in Dubai will be taxable until FY 2014 - 2015?


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## nikkisizer (Aug 20, 2011)

Hello Renoir21,

If you are leaving the UK to work abroad you will become not resident and not ordinarily resident from the day after the day of your departure as long as:

• you are leaving to work abroad under a contract of employment for at least a whole tax year

• you will be absent from the UK for at least a whole tax year

• your visits to the UK after you have left to begin your overseas employment will total less than 183 days in any tax year and average less than 91 days a tax year. This average is taken over the period of absence up to a maximum of four years

Under current tax rules if you satisfy these requirements then your UAE employment earnings will not be subject to UK taxation.


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## Renoir21 (Nov 5, 2012)

Hello Nikkisizer,

Thanks for the response.

I've added a few comments against your post:
• you are leaving to work abroad under a contract of employment for at least a whole tax year
- Yes, I'll be on a 2 year contract with potential for a 3rd and 4th year extension.

• you will be absent from the UK for at least a whole tax year
- No, I'll spend the first 2 - 4 weeks employed in the UK.

• your visits to the UK after you have left to begin your overseas employment will total less than 183 days in any tax year and average less than 91 days a tax year. This average is taken over the period of absence up to a maximum of four years
- I'll spend less than mentioned above.

The key is I wont be non resident for the entire 2013 - 2014 tax year though will be for 2014 - 2015. Does then mean I'll be classed as non resident for 2013 - 2014?


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## Aberdeen Angus! (Mar 26, 2012)

nikkisizer said:


> You will need to register for self assessment if you have not done so already and file a tax return declaring your rental income from UK property.
> 
> Rental income from UK property is subject to UK taxation regardless of whether you are classed as UK resident or not.


If you rent out your property and you are not resident in the UK, the leasing agent is responsible for ducting tax at source before you receive the rent. Now this is the best bit, if you rent the property out privately the tenant must withhold tax from the rent and pay it to HMRC. You then need to claim your expenses against the tax deducted on your self assessment form, meaning you will get a rebate. But there is ways to get around this one by setting up a ltd company for the property or there is a form from HMRC which you can try and get an exemption if the profit is less than I think £5k per year.


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## vantage (May 10, 2012)

yoplu said:


> Talk to PIC De vere, Globaleye, or AES Finance. They are the main 3 out here and its their bread and butter business advising on this


After several painful cold calls from De Vere, i'd steer well clear!
Don't know about the other two


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## vantage (May 10, 2012)

my accountant in the UK sorted it all out.

Officially non-domiciled in UK
All earnings here tax free
All UK business-related earnings in UK taxed (self assessment)
All property rental income in UK taxed (minus mortgage interest & maintenance) (self assessment)

having only been here 6 months, got a tax bill for end of Jan.
Accountant has sorted it to go away, as my part-year PAYE covers the difference to wipe out the payment 'on-account' 
Just as well, as the coffers back home are running on vapours!

my advice : get a UK Accountant (based here or in UK) to sort it all out for you, or at least get you set up for year 1 if you want to do it yourself.

If it is just a case of rental income, it's perfectly do-able yourself, but worth getting pointed in the right direction first!
If there are other factors, you might need more help! (i do! HMRC = Labyrinth!)


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## nikkisizer (Aug 20, 2011)

vantage said:


> my advice : get a UK Accountant (based here or in UK) to sort it all out for you, or at least get you set up for year 1 if you want to do it yourself.


I couldn't agree more


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## nikkisizer (Aug 20, 2011)

Aberdeen Angus! said:


> If you rent out your property and you are not resident in the UK, the leasing agent is responsible for ducting tax at source before you receive the rent. Now this is the best bit, if you rent the property out privately the tenant must withhold tax from the rent and pay it to HMRC. You then need to claim your expenses against the tax deducted on your self assessment form, meaning you will get a rebate. But there is ways to get around this one by setting up a ltd company for the property or there is a form from HMRC which you can try and get an exemption if the profit is less than I think £5k per year.


Either way a tax return will need to be submitted if your rental income from UK property is:

- £10,000 or more before deducting allowable expenses
- £2,500 or more after deducting allowable expenses


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## vantage (May 10, 2012)

nikkisizer said:


> I couldn't agree more


i could work on commission....!


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## nikkisizer (Aug 20, 2011)

And it would be tax free :clap2:


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## nikkisizer (Aug 20, 2011)

Renoir21 said:


> The key is I wont be non resident for the entire 2013 - 2014 tax year though will be for 2014 - 2015. Does then mean I'll be classed as non resident for 2013 - 2014?


Under current tax legislation, from the day after the day of your departure from the UK, yes. 

However, the rules are expected to change from the 2013/14 tax year onwards with various statutory residency tests coming into effect which will need to be satisfied to be classed as non UK resident.


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