For UK expatriates returning to Britain for good, there are tax issues that cannot be avoided. The taxman takes great interest in returning expatriates, and the rules are extensive and complicated.
Before beginning the process of re-introducing yourself to the United Kingdom, you must first fully understand your UK tax position. A vital aspect of this is to ascertain whether or not during your time away you could still have remained a UK resident in the eyes of HMRC.
If you did it’s very likely that they will see you as being liable to pay all the tax you missed while you were away. Depending on your connections (businesses or assets in the UK) or the number of days per year you spent back there during your time overseas, depends on the viewpoint taken by HMRC.
Tax plan assessment
Many people leave the UK with tax planning at the forefront of their decision making process. If this is the case, it is important to ensure that your original plan works if you return when you hope to. As a guide, you should remain a non-resident for at least five years for tax-efficiency purposes, although this can vary in certain circumstances.
Other considerations come in the form of an assessment of your tax circumstances before you left. Any issues that existed will not have gone away simply because you were overseas for a few years. In fact, once you’re back, you and your assets overseas will be under the microscope to an extent, so it’s important that you have everything arranged prior to moving back. It’s also equally important that you are open and upfront with HMRC.
HMRC has a network of overseas units and investigation teams, and they have more tools at their disposal than ever before to assist in their pursuit of tax evaders.
Credence International handles client repatriation cases regularly and can provide guidance and assistance in ensuring that all your tax affairs are in order before you return, removing one of the stresses of moving back to the UK.
We assess the following:
- Current worldwide assets
- Foreign bank accounts
- Continuing overseas income
- Inheritance Tax efficiency
We are nearing the age of global tax transparency, to follow in the footsteps of the US FATCA legislation. More than 50 countries around the world have signed up to an information sharing treaty, and new technology means that identifying those trying to embezzle or hide away income will not be able to hide for long.