The tax rules have changed recently and you will need to take care if you are hoping to leave the UK and relinquish UK residence for tax purposes. You should also be aware that the approach taken by Revenue & Customs to taxpayers leaving the UK for tax purposes has hardened considerably recently, so you will need to consider your medium term plans very carefully if you wish to establish non residence.
As the test of residence normally applies for a whole tax year, if you are planning to leave the UK ensuring that you go in the last few months of the tax year might provide an extra year of non residence once you have established non UK status.
Planning your visits to the UK in advance is also a good point to start, so that you have some days ‘in hand’ for emergencies such as an unexpected family event. In some cases visits to the UK can be ignored, but it is wise to plan carefully in the early years after departure.
You should also be aware that although leaving the UK takes effect for income tax purposes almost immediately, any capital gains realised during the first 5 years abroad can end up being taxed in the UK if you have to relinquish your non resident status.
Tags: higher tax rate, Offshore, Personal tax returns, tax relief
