Finance FAQ’s

To follow are a selection of common questions to help guide you. If you have any other questions which you would like answered please email us.

I’m leaving the UK to work overseas. How do I become non-resident?

Provided you are working full-time overseas, you will need to ensure that both your contract and your absence from the UK encompasses a complete tax year (6th April-5th April). Residency rules are changing so please contact us for further advice on this subject.

How do I become non-resident if I am retiring overseas?

You will need to demonstrate that there is a degree of permanence to your move. It is normally recommended that you will need to be outside of the UK for at least three years. You are entitled to visit the UK, although your visits need to be less than:

183 days in any one tax year, and,
91 days on average, taken over the period of your absence or four tax years, whichever is the shorter.

This is an aspect that HM Revenue and Customs is paying particular attention to and therefore specialist advice is required. Click here to read our new article on this topic.

How can I avoid Capital Gains Tax whilst living overseas?

Exemption does depend upon any previous absence from the UK and the length of time you have been overseas. The chart contained within our Moving Abroad to Escape Capital Gains Tax guide should be of assistance.

I am non-resident. Am I still liable to Inheritance Tax?

Any liability to Inheritance Tax is determined by your domicile position rather than your residence status. Domicile is a legal concept and is perhaps best described as the country you consider to be your homeland. If this is outside of the UK, although assets in the UK can still be liable, overseas assets fall outside of the charge. Action can be taken to further improve your position with regard to UK assets. For those whose domicile remains in the UK, it is important to ensure that Wills have been written to minimise your exposure to UK tax. Why not review your potential Inheritance Tax liability using our online calculator and see how we can help you by reading our Estate Planning guide.

I have heard about Double Taxation Agreements, but am not sure how these can help me.

The UK has entered into many hundreds of agreements with other countries. Primarily the aim of these are to ensure that where an individual falls under two separate tax regimes, they are aware which country has the right to tax a particular source of income. These agreements can also allow you to receive pensions without tax deduction at source in the UK, normally provided it is taxed in the other country. Obviously, if there is a lower tax rate available there, then this can be beneficial. However, most agreements are highly sophisticated and all differ in subtle ways, so care and further advice is required.

I am letting out my UK property whilst overseas. What do I need to consider?

Even if you are non-resident, income arising in the UK, with certain exemptions, will remain potentially liable to UK tax. You will need to ensure that you register with HM Revenue and Customs as a Non-Resident Landlord, otherwise your letting agent will be legally obliged to deduct basic rate tax from the rental income. For more information about letting your property, download a copy of our Expatriate Landlord guide. There is also likely to be the annual completion of a self-assessment tax return. We can help with this so contact us for further advice.

I have heard that the UK Government is reducing the number of year's NI contributions required to receive a full state pension. Should I stop paying voluntary Class 2/3 contributions?

On 26th May 2006, the UK Government issued a white paper announcing that the number of years’ contributions required for people to qualify for a full basic state pension will be cut to 30. This will apply to anyone reaching State Pension Age on or after 6th April 2010. The Department of Work and Pensions has advised that anyone affected should carefully consider whether to delay paying any further Class 2/3 contributions because refunds for over-payment will not be made. We would urge you to seek professional advice before you make any decision to ensure that you have made the level of contributions required to receive a full state pension. Please contact us for further advice.

If you have any other questions which you would like answered please email us.