Moving to the UK - Tax implications

Nika Bolokov

Hi All,

Spent 3 months working in Ireland in 2013. Reckon I'm due a large refund. Taxed at the higher rate.

Will be working in the UK for the last four months of 2013 where I will now reside (previously always lived in Ireland), A period of travel (long holiday) in between the two.

Am self assessed.

Will I get a whopper bill for my UK earnings from Revenue even though Ill be taxed at the UK rates and paying UK tax ?

Will they disregard my UK earnings since I was taxed in the UK ?

Can I ask the Revenue for a refund now on the Irish bit as I wont be coming back to Ireland, I'm self assessed ?

Any help much appreciated !!!!!

srsly78

The uk tax year does not line up with ours either I think, it's a messy situation. Definitely need professional advice.

Marcusm

Both countries operate what is known as split year treatment. For Irish tax provided you are moving abroad for (effectively) the foreseeable future, your foreign employment income is not subject to tax for 2013 even if you are Irish resident for the year. The UK will not tax income arising prior to you becoming resident and will give you a full year's tax allowances (equivalent to credits but works in a different way, the same way as it used to work in Ireland). If you have other sources of income, your position will be more complex and you should speak with an advisor who can take account of all of your personal factors.

Nika Bolokov

Cheers !

Nika Bolokov

Would anyone know if I have to wait until 2014 to claim split year relief?

I'm self assessed and am working in the UK.

Marcusm

UK treatment

The "split year" operates from the date you arrive provided you fulfill the criteria in the UK - I have set out the text of the extra statutory concession below. (1) Have you ever lived in the UK previously? (2) Are you intending to stay 2 years at least? if you can answer (1) No and (2) Yes then there should be little doubt and you will be taxed on the income from the date you start. "Self assessed" in the UK applies to practically everyone. Do you mean self employed?



A11. Residence in the United Kingdom: year of commencement or cessation of residence

The Income and Corporation Taxes Acts make no provision for splitting tax years in relation to residence and an individual who is resident in the United Kingdom for any year of assessment is chargeable on the basis that he is resident for the whole year.

But where an individual:

comes to the United Kingdom to take up permanent residence or to stay for at least two years, or
ceases to reside in the United Kingdom if he has left for permanent residence abroad,

liability to United Kingdom tax which is affected by residence is computed by reference to the period of his residence here during the year. It is a condition that the individual should satisfy the Board of Inland Revenue that prior to his arrival he was, or on his departure is, not ordinarily resident in the United Kingdom. The concession would not apply, for example, where an individual who had been ordinarily resident in the United Kingdom left for intended permanent residence abroad but returned to reside here before the end of the tax year following the tax year of departure.

This concession is extended to the years of departure and return where, subject to certain conditions, an individual goes abroad for full time service under a contract of employment. These conditions are:

the individual’s absence from the United Kingdom and the employment itself both extend over a period covering a complete tax year, and
any interim visits to the United Kingdom during the period do not amount to

183 days or more in any tax year, or
an average of 91 days or more in a tax year (the average is taken over the period of absence up to a maximum of four years), and

for years up to and including 1992-93, all the duties of the employment are performed abroad or any duties the individual performs in the United Kingdom are incidental to duties abroad.

Where the concession applies and the tax year is split, Section 128 Finance Act 1995 (limit on income chargeable on non-residents: income tax) does not apply for the period for which an individual is treated as not resident. That Section only applies to complete years of non-residence."

Irish treatment

Again provided you fall within it you are treated as non resident for the taxation of emloyment income from when you leave. Some helpful comments from the Irish Revenue

If you are resident during the tax year you leave and non-resident for the following tax year, you will, as regards the taxation of employment income, be deemed to be non-resident from the date of your departure. This means that your employment income will be exempt from Irish tax from that date.

In order to avail of this arrangement, known as split year treatment, it is necessary that you satisfy your Local Revenue office of your intention not to be resident in the State for the tax year following your departure. In this regard, a statement from your employer or a copy of your contract of employment indicating the length of time you intend to spend working abroad should be submitted in support of your claim.

Revenue may then issue what is known as a PAYE Exclusion Order to your employer authorising him/her not to deduct tax from your salary. An Exclusion Order will operate from the date of your departure and will be effective for as long as you remain non-resident and the duties of your employment continue to be exercised abroad. Although you will be deemed non-resident from the date of your departure, you are nevertheless due full personal tax credits for the complete tax year. In those circumstances, you may be entitled to a tax adjustment, taking into account the unused portion of your tax credits (see question I am going abroad and have not used up my full tax credits for the tax year in which I leave. How do I claim a refund of tax paid?).

Alan Shore

I think that the OP is self employed.

On the basis that they are resident and domiciled in Ireland they are subject to tax on worldwide income in 2013 with relief for employment income know as Split Year Relief.

Perhaps the OP would clarify if the are self employed.

Nika Bolokov

No not self employed its all PAYE. some years ago I had other income but not any more so I registered then.

Wondering do I have to wait until 2014 to sort this as I still submit a tax return or can I submit some form now as I wont be back in the near future.

Alan Shore

Nika Bolokov wrote: »

No not self employed its all PAYE. some years ago I had other income but not any more so I registered then.

Wondering do I have to wait until 2014 to sort this as I still submit a tax return or can I submit some form now as I wont be back in the near future.

http://www.revenue.ie/en/tax/it/forms/p50.pdf

Nika Bolokov

Brilliant, Thanks !!!