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Are you living abroad but have a business in the UK? Or perhaps you live abroad and have rental properties in the UK? Either way, we’re dishing out everything you need to know about living abroad and UK tax!
Well, this depends. If you earn any income in the UK, then yes, you will most likely have to pay income tax. This could be from:
Each country has different rules when it comes to tax. This means you may well find yourself paying tax in both the UK and the country you live in.
That is unless the country you live in has a Double-Taxation Agreement (DTA) with the UK.
A DTA is a rather convenient treaty for anyone who doesn’t particularly feel like dividing up their earnings to share out between two tax authorities. It enables you to apply for either:
Each agreement with each country differs so be sure to check the full list here!
If you live abroad and have to pay tax in the UK, luckily, you don’t have to book a flight to London every time tax is due! Instead, you’ll have to submit a Self Assessment tax return and SA109 form by post.
Unfortunately, you won’t be able to use the HMRC online services. It isn’t all bad though, because you will still be able to use a professional service such as TaxScouts to file your tax return if you’re stuck! 🙌
For an even more detailed breakdown of how to pay UK taxes when you live abroad, you’ll want to read our guide on this!
For tax purposes, it might help to understand the difference between a UK resident and non-UK resident living outside the UK.
But first of all, to be considered a UK resident, you have to:
Now, the main difference (in tax terms) is:
Perhaps a quick example will help break it down for you:
Ben lives in Switzerland, and works as a full-time professional chef. He has a rental property in London which brings in extra money. His best mate Eleanor also works in Switzerland and also has a rental property in London (BFF goals! 👯).
Ben pays UK tax on just the rental property, whilst Eleanor pays UK tax on her wages as well as her rental property income. They are both exempt from double taxation.
But they’re exactly the same?! 😕 Well actually, there’s just one small (or massive) difference..
Also, the UK has a double taxation agreement with Switzerland – hence the tax exemption!
We get it, it can be a lot to take in at once! Our accredited accountants are more than happy to provide expert yet simple 1:1 tax advice for just £119. Find out more here.
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