If you’re a British expat, you might face a situation where you need to return to the UK quickly, as a result of an emergency. This can expose you to UK tax, although steps can be taken to help reduce your liability.
What is emergency repatriation?
If you live overseas, you may have planned how long you’ll be an expat, perhaps due to a work contract of a specific length. In this situation it’s easy to have a timeline which you can work to ahead of your return, enabling you to plan accordingly. If an unexpected change happens – either in your work or personal life – you might need to return to the UK at short notice, without that usual time to plan. You may also find yourself needing to stay in the UK for a short or extended period, or accelerate your plans for a permanent return home.
When is emergency repatriation appropriate?
Emergency repatriation happens if you find yourself in an unexpected situation which requires your immediate return to the UK. The most common reasons include:
- Redundancy or a change in your work situation – which may mean that your visa becomes invalid
- Political unrest or UK government advice to repatriate
- Illness – which requires you to be back in the UK for treatment or care
- A change in family circumstances – for example if a close family member falls ill and you need to relocate to the UK quickly to provide support and care
The emergency repatriation process
If you are repatriating to the UK in an emergency, the main focus, beyond your logistical plans, is to consider what impact your emergency repatriation will have on your UK tax residence status. Your return might leave you with an unexpected UK tax bill because you become UK tax resident at an earlier date than you anticipated. If this is the case some action can be taken to reduce your tax liability. It’s important to keep clear records so that you can calculate when you become UK resident for tax purposes.
The Statutory Residence Test is the framework used to calculate residence, and an expert tax adviser can help guide you through the rules. You should also consider the impact for taxes in the country you are leaving.
Don’t forget too to think about other financial considerations including any property commitments, bank accounts, life assurances, pensions and investments, and decide what actions are needed for personal and tax reasons.
Emergency repatriation with The Fry Group
Ideally you should begin planning for repatriation 12-18 months before any move back to the UK. This allows time for any essential arrangements and the opportunity to structure your tax and financial position to best effect.
If you find yourself unable to plan ahead, and need to repatriate in an emergency, working with a specialist global adviser will help you steer through any tricky tax and financial matters.
The Fry Group has eight offices around the world, and a team of experienced advisers, who can help whatever the circumstances.
Would you like to find out more?
We are here to help with your tax planning requirements. For more information, whatever your circumstances, please contact us today.