Moving to Middle East

[newbie80]

Hi all,

I am new to this forum and this question may already been answered, so please excuse me.

I have been a contractor for the last five years and I am on a pretty good rate.

Now I have been given an opportunity by one of my previous managers to work with him in the Middle East (where he is moving to). The rates aren't good as in the UK, but its tax free.

I need some advise, is there anything in particular I need to keep in mind, i.e.

Keep my limited company afloat (even though I won't be invoicing through it)
Do I have to pay income tax here in the UK (I will have some ties at-least for one year).
Any other issues around taxation?

Thanks in advance.
Yenkay

[stek]

If you have ties here you will pay tax here.

If you are not a BC and are on ILR you will lose it after 2 years absence....

[Jessica@WhiteFieldTax]

Alas there is no such thing as "tax free". At best it means there is no tax deduction at source and no liability in the host country.

There will be a number of ifs and buts around UK tax, and you need to take personalised advice from your accountant.

If you are away from the uk long enough, and cut enough ties, it will be uk tax free, if you don't, it won't.

The rules on working abroad and leaving uk have been overhauled radically in the past couple of years, and are not fully bedded in. That's why you need personalised, thought through advice, for your particular circumstances - there are simple answers in your case.

[newbie80]

If you have ties here you will pay tax here.

If you are not a BC and are on ILR you will lose it after 2 years absence....

Thanks for your reply. I am BC, so it's okay.

[newbie80]

Alas there is no such thing as "tax free". At best it means there is no tax deduction at source and no liability in the host country.

There will be a number of ifs and buts around UK tax, and you need to take personalised advice from your accountant.

If you are away from the uk long enough, and cut enough ties, it will be uk tax free, if you don't, it won't.

The rules on working abroad and leaving uk have been overhauled radically in the past couple of years, and are not fully bedded in. That's why you need personalised, thought through advice, for your particular circumstances - there are simple answers in your case.

Thanks for replying. Sure I understand taxes are based on personal circumstances. I wasn't sure about the limited company to still keep it active or not..

[Jessica@WhiteFieldTax]

Keeping the limited company active will naturally flow from the advice.

AFAIR it's not a negative tie in residence issues, although there is a string argument to loose the tie to be on the safe side.

It may come down to whether you and/or your accountant prefer to leave it dormant or start over when you return.

It could be a good opportunity for a capital payment, but don't expect that to be tax free viz UK CGT unless you are abroad for several years (think it's five) or there is an esoteric tax treaty in your favour (unlikely).

[BlasterBates]

Just follow the instructions here:

HM Revenue & Customs: Tax when leaving the UK

HMRC will then decide if there is any further tax to pay, i.e. whether they accept you would no longer be resident.

The P58 form is pretty straightforward.

Generally if your intention is to move away longterm and you are non-resident there will be no tax to pay; if your circumstances change i.e. you move back sooner than expected they would then review it.

If your wife or partner are in the UK that would usually indicate you remain resident. If you have a flat or a house and return regularly this also usually means you remain resident. Basically if the UK is "home" you're resident, even if you work abroad. In this case you pay tax.

If you want to be non-resident you should give up your flat or rent your house out and just come back for occasional visits and stay in a hotel, i.e. make a clean break.

Keeping the Ltd company normally wouldn't be relevant in determining your residency.