Dual residence & filling in a UK return

[doodab]

Right then, how does one go about filling in UK tax return when one is resident in both the UK & Germany and all of ones income is from Germany?

I am almost certainly dual resident as I still pay rent in the UK & visit on a monthly basis. Can I fill in a retrospective P85 and if so do I still have to submit a UK tax return?

Also it's not exactly clear but it seems to be the case that if I do need to submit a UK return, do I need to declare my income on the "self employed" section and then claim relief from UK tax, and all of the numbers need to be translated into sterling. Any ideas where to start with that?

[Taxless]

I think a bit more information is required.

Whether you need to complete a UK tax return depends on a number of factors.

As far as a P85 is concerned, you can submit one at anytime.

For the remainder of your query : When did you leave the UK, was this to take up full time employment abroad, how long do you intend to be out for, how many days have you spent in the UK since your departure up to the following 5 April and each subsequent 5 April (if you left prior to 5 April 2010) and how many days do you anticipate to be out each year in future, what is the purpose of your return visits, were you employed (whether in your own Ltd company or otherwise)/self employed/unemployed, before you left the UK, is the income abroad paid to your own Ltd company or to you as an individual, do you have any other UK income sources?

[doodab]

I think a bit more information is required.

Whether you need to complete a UK tax return depends on a number of factors.

As far as a P85 is concerned, you can submit one at anytime.

For the remainder of your query : When did you leave the UK, was this to take up full time employment abroad, how long do you intend to be out for, how many days have you spent in the UK since your departure up to the following 5 April and each subsequent 5 April (if you left prior to 5 April 2010) and how many days do you anticipate to be out each year in future, what is the purpose of your return visits, were you employed (whether in your own Ltd company or otherwise)/self employed/unemployed, before you left the UK, is the income abroad paid to your own Ltd company or to you as an individual, do you have any other UK income sources?

Ok, first things first, this is in relation to a belated 09-10 return, but will probably apply to my 10-11 one as well.

I left the UK in september 2008 to take up full time self employment i.e. I am not an employee but the income is paid directly to me, not a company.

I appears I will be returning next month. I had no specific intentions regarding length of stay when I left. Before I left I was a ltd co contractor for more than 10 years.

I have spent about 40 or 50 days in the UK in each of 09-10 and 10-11. The return visits are to visit my family (including my son), go to weddings and so on.

My only UK income is bank account interest.

So on the "days in the UK" basis I think I might be non-resident. However, I'm still a director of two companies (no income from them to worry about) and I think still an employee of one of them, and I still pay rent on the flat my family (and I, when I'm here) live in. Which makes me think I am dual resident.

My first instinct is to fill the form in, claim non-residence and let HMRC challenge it if they disagree. I'm certain I don't owe them anything as all my taxes have been paid here and relief would be claimable under the DTA, but I would prefer to avoid the hassle of filling in two extra sections of tax return to prove it, especially as the self employment one looks like it might require a second set of accounts drawn up in sterling and taking account of exchange rate fluctuations.

[Brussels Slumdog]

Double taxation

Have you read the UK - Germany double taxation agreement.
There may be a clause in the agreement relating to being a tax resident in the two countries in the same year.
In some double taxation agreements the 2 countries come to a mutual agreement in which country you are tax resident.

[doodab]

So anyway, assuming I am dual resident and need to fill in the self employment and foreign tax relief sections, which of HMRCs sets of advice should I follow?

HM Revenue & Customs: Frequently Asked Questions about the euro - Individuals appears to say that for an individual each and every transaction should be translated into sterling at the prevailing exchange rate, i.e. I would need to draw up a whole new set of accounts.

HM Revenue & Customs: Frequently Asked Questions about the euro - UK companies appears to say I can that a UK company can if it wishes draw up accounts in euro and simply take the final profit figures and translate that into sterling.

Now it seems to me that I fall somewhere in the middle. To my mind as a self employed "business" I ought to be able to take my profit for the accounting period, and my tax paid for the accounting period, and translate them both into sterling at the appropriate rate (the tax paid in order to claim relevant relief), however as I am clearly not a "UK company" the advice above appears to contradict that.

What a palava.

[doodab]

Have you read the UK - Germany double taxation agreement.
There may be a clause in the agreement relating to being a tax resident in the two countries in the same year.
In some double taxation agreements the 2 countries come to a mutual agreement in which country you are tax resident.

In terms of the treaty I am clearly resident and liable to pay tax in Germany, as I've been here about 300 days a year.

The problem is from a paperwork perspective it seems I might be resident in both countries. In much the same way as the Germans require me to declare all of my income the UK appears to want the same thing i.e. that I declare my German income and claim relief on the tax paid. Unfortunately they don't make it very clear how to go about it.

[Tanya@SC Lee Accountant Ltd]

As a director of a company by law you need to do your tax return ,the employment page.
Thanks
Harry Lee
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In terms of the treaty I am clearly resident and liable to pay tax in Germany, as I've been here about 300 days a year.

The problem is from a paperwork perspective it seems I might be resident in both countries. In much the same way as the Germans require me to declare all of my income the UK appears to want the same thing i.e. that I declare my German income and claim relief on the tax paid. Unfortunately they don't make it very clear how to go about it.

[stek]

As a director of a company by law you need to do your tax return ,the employment page.
Thanks
Harry Lee
Tax, accounts, bookkeeping Croydon Purley London UK Accountant SC Lee

Director of what company? He's a freelancer in Germany......

[doodab]

As a director of a company by law you need to do your tax return ,the employment page.
Thanks
Harry Lee
Tax, accounts, bookkeeping Croydon Purley London UK Accountant SC Lee

But can I just fill in the basic form and the "residence, remittance basis etc" part and say I am non resident? Or do I need to do the whole self employment section and claiming of tax relief?

Looking at HMRC6 section 8.5 and 8.8 I would appear to be non-resident. But then looking at section 2.2 I'm not so sure.

I think I will give them a call tomorrow and ask them what they think.

[doodab]

Director of what company? He's a freelancer in Germany......

Yeah but I'm still a director of 2 UK companies. I definitely have to file a UK tax return, I just don't know what I need to put on it.