# Tax Question



## TT365 (Oct 14, 2014)

Hi all,

I have searched for this and I have spent over 30 minutes on hold to HMRC before my phone dropped the call! So I thought I would post it here as I won't be able to call HMRC again for a couple of days.

We are planning on moving at the end of December/beginning of January. I for see we will have a lot of expenditure in the first month (school fees, uniforms, serviced apartment, advanced rent for our house/apartment, car etc etc) so I have agreed with my employer that my housing allowance can be paid up front but I would like that paying in the UK before I leave as the structure for payments from the Dubai office is complex and often slow and I would need to have a local bank account (I realise for some things like the rent I would need a bank account anyway), this way I know I have the money and can use it immediately.

If my employer pays this to me in the UK am I liable for tax? Has anyone had a similar situation where they have received advanced payments?

Thanks

TT


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## twowheelsgood (Feb 21, 2013)

Yes.

You are receiving money in the UK while not a non-resident.


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## TT365 (Oct 14, 2014)

That's what I feared! Thanks.


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## BedouGirl (Sep 15, 2011)

Could you see if you can open a bank account here before you arrive with the money as the opening deposit? Try Emirates NBD.


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## Steve87 (Nov 10, 2014)

You might want to check if there is a minimum period as well. For US citizens we have to be out of the country for 330 out of 365 before we can start claiming taxes as an expat. So it might not matter either way.


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## TT365 (Oct 14, 2014)

Thanks Bedougirl, I didn't think that was possible I will certainly try.

I think it's different in the UK Steve as long as I change my tax residency I believe


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## nikkisizer (Aug 20, 2011)

Hi TT365,

You can also try ADIB for your bank account:

Electron Account | Abu Dhabi Islamic Bank


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## Mustii (Jul 19, 2014)

Could you try and get your company to give you the money in a cheque and confirm that the Cheque is ready to be picked up from HR before travelling, then you can set up a bank account here, normally the account is open within 2 days and you will receive the card the day after it is open. then you can go in and cash in the cheque? 

Otherwise I know Standard Chartered can open an account prior to your arrival, but then again I am not sure whether you want to go with an International bank or a local bank.

Also if your employer accepts to pay you in UK, I assume you then want to cash that money out and bring it along with you when you come here, depending how much that amount is you might loose quite a bit through exchanging it, as the company will pay it in AED you will receive in the UK in Sterling, and then you will bring Sterling with you and have to exchange it to AED - with the pound weakening against the dollar nearly everyday I would not want to go for that option if it is a substantial amount you are getting.


Good luck


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## twowheelsgood (Feb 21, 2013)

His company isn't likely to issue a cheque in AED. 

Also, irrespective of the date of cashing the cheque, if he isn't deemed non-resident for tax purposes, it will still be considered income and hence taxable. 

The only way I can see is to do a P85 and try and claim to be non resident for the remainder of the year, but sometimes HMRC will reject this as although he is outside the UK he has been in the UK for the majority of the year and would fail the test due too too many days in the UK.


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## BedouGirl (Sep 15, 2011)

twowheelsgood said:


> His company isn't likely to issue a cheque in AED. Also, irrespective of the date of cashing the cheque, if he isn't deemed non-resident for tax purposes, it will still be considered income and hence taxable. The only way I can see is to do a P85 and try and claim to be non resident for the remainder of the year, but sometimes HMRC will reject this as although he is outside the UK he has been in the UK for the majority of the year and would fail the test due too too many days in the UK.


They could arrange a TT or issue a banker's draft I think. Some banks will accept cheques in other currencies but they are subject to charges and exchange rates, but you're probably right in terms of taxation. OP's company should be able to advise on this aspect.


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## zed1212 (Feb 13, 2014)

Hi TT im in a similar position and have been in consultation with my UK tax adviser regarding our relocation. The difference is i have managed to initiate the process on a UAE bank account and this seems to be the crucial point in terms of tax treatment. From my limited knowledge you need to show you left the UK and then got the funds to avoid being taxed non this in the UK. You can then apply for split year treatment to avoid tax on earnings.


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## Southak (Sep 13, 2010)

TT365 said:


> Hi all,
> 
> 
> We are planning on moving at the end of December/beginning of January. I for see we will have a lot of expenditure in the first month (school fees, uniforms, serviced apartment, advanced rent for our house/apartment, car etc etc) so I have agreed with my employer that my housing allowance can be paid up front but I would like that paying in the UK before I leave as the structure for payments from the Dubai office is complex and often slow and I would need to have a local bank account (I realise for some things like the rent I would need a bank account anyway), this way I know I have the money and can use it immediately.
> ...


I had a similar problem. The thing to do is claim your fees back as expenses in the UK. Expenses are a non-taxable income and you can claim all your initial fees, flights, uniforms as moving expenses and the company can pay you the money without fear of taxation. 

For the first month I didn't have an UAE bank account so all my initial set up fees were converted to GBP and then paid to my UK bank account - tax free. 

If they pay it to you as a bonus or as part of a salary then clearly it is taxable.

Moving an employee to a new country is clearly a valid business expenses and this is not taxable.


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## TT365 (Oct 14, 2014)

Thanks all for the guidance, I am going to get the 'shipping allowance' in advance in cash in the UK then claim expenses against this as that is what it will be for and then the larger amount will be paid to my account as I transfer over so with any luck it will be there a few days before I need it!

Does anyone have any experience on the length of time it takes for UK to UAE transfers (I will normally be paid from the UAE).

Thanks

TT


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## nikkisizer (Aug 20, 2011)

Hi TT,

Normally around 3-4 working days depending on your bank.


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## TT365 (Oct 14, 2014)

Thanks Nikki


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## Navaron (Oct 13, 2014)

You need to minimize the ties to the UK as much as possible , being paid into a UK bank account is a tie.

I think there are better threads which describe the tax situation for Brits over here and what constitutes being non-resident


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## nikkisizer (Aug 20, 2011)

TT365 said:


> Thanks Nikki


You are most welcome


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