# Redundancy Pay - subject to UK tax?



## Dubai1970 (May 12, 2012)

If a UK expat is made redundant while living and working in DXB, what proportion of his redundancy lump sum will be taxed in the UK, and what is considered tax exempt? 

The first 30k is tax free - but what portion of the rest attracts UK tax, given that you are non-resident for tax purposes when you get the lump sum??


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## Stevesolar (Dec 21, 2012)

Hi,
Confusing question.
Is the Expat working for a UK or UAE company?
Is the Expat paid in UK pounds into a UK account or AED into a UAE account?
Is the Expat already properly registered with HMRC as non-resident for UK tax purposes?
The exact answer to your question will depend on answers to the above.
Cheers
Steve


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## twowheelsgood (Feb 21, 2013)

Dubai1970 said:


> given that you are non-resident for tax purposes when you get the lump sum??


Then make it not so ?

All the people I know who have left companies here have made a point of getting every penny owed, before their residency is cancelled, so it's treated as money earned while overseas, and in some cases, did a deal with the company to get any future bonus payment made earlier in return for a discount.


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## Dubai1970 (May 12, 2012)

Stevesolar said:


> Hi,
> Confusing question.
> Is the Expat working for a UK or UAE company?
> Is the Expat paid in UK pounds into a UK account or AED into a UAE account?
> ...


You're right, sorry Steve. Answers:

- UK company
- Paid in AED into a DXB Account
- Registered properly with HMRC as non-resident for tax purposes.
- Expat was formerly UK resident with same employer before moving to UAE a few years ago. 

Many thanks for your help.


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## Dubai1970 (May 12, 2012)

twowheelsgood said:


> Then make it not so ?
> 
> All the people I know who have left companies here have made a point of getting every penny owed, before their residency is cancelled, so it's treated as money earned while overseas, and in some cases, did a deal with the company to get any future bonus payment made earlier in return for a discount.


Interesting point - thank you.


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## Stevesolar (Dec 21, 2012)

Hi,
Then, as suggested above - ensure all payments are made in AED into UAE bank account before you cancel your residency visa here.
Remember, to cancel your visa - you will be asked to sign a paper that confirms you have been paid all your outstanding monies. Once you have signed this - MOL would not normally intervene if someone then says money is still owed to them.
It is therefore doubly important to make sure you are paid properly before cancelling your visa.
Cheers
Steve


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