If you leave the UK but remain a temporary non-resident for tax purposes, you may still be liable for UK tax on certain income and gains when you return. Here’s what you need to know:
What is Temporary Non-Residence?
- You are considered temporarily non-resident if you leave the UK but return within five tax years.
- This rule applies to individuals who were UK tax residents for at least four out of the seven tax years before departure.
Tax on Capital Gains
- If you dispose of assets while non-resident (e.g., selling shares, property, or a business), you may still be taxed on these gains when you return to the UK within five years.
- Certain gains, such as those from UK property, are taxable even if you remain non-resident.
Dividends & Other Income
- If you extract profits from a UK company via dividends while abroad, HMRC may still tax them upon your return if they were planned to avoid UK tax.
- Other sources of UK income (e.g., rental income) remain taxable while non-resident.
Planning Considerations
- If you plan to leave the UK, ensure you understand the Statutory Residence Test to determine your tax status.
- Consider structuring disposals and income extraction to minimize tax exposure.
Temporary non-residence can create unexpected tax liabilities, so professional advice is essential for effective planning.
For Help with Topic above or any Accountancy help – contact us: