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Old 07.07.2011, 11:16
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Tax upon return to UK?

Hi,

Can anyone please tell me the minimum period you need to stay in Switzerland, to avoid being taxed back in the UK upon our return?

Is it the case that if we return before the end of the tax year, we will be taxed more to make it up to the 40% tax on my husbands earnings?

Any advise greatly appreciated,
Thanks
Emma
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Old 07.07.2011, 13:06
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Re: Tax upon return to UK?

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Hi,

Can anyone please tell me the minimum period you need to stay in Switzerland, to avoid being taxed back in the UK upon our return?

Is it the case that if we return before the end of the tax year, we will be taxed more to make it up to the 40% tax on my husbands earnings?

Any advise greatly appreciated,
Thanks
Emma
We need more details, will the revenue believe you ever actually left the UK for tax as far as tax is concerned? Did you sell your house etc.

The absolute minimium would be 1 full tax year.
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Old 07.07.2011, 13:11
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Re: Tax upon return to UK?

Broadly, according to tax treaties, you cannot to taxed twice for the same thing, so its unlikely that you will pay Swiss income tax and then UK income tax on the same earnings....

But I suggest you need better advice than you'll get here....might be worth paying a couple of hundred francs for some professional tax advice
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Old 07.07.2011, 13:25
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Re: Tax upon return to UK?

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Broadly, according to tax treaties, you cannot to taxed twice for the same thing, so its unlikely that you will pay Swiss income tax and then UK income tax on the same earnings....

But I suggest you need better advice than you'll get here....might be worth paying a couple of hundred francs for some professional tax advice
That's incorrect, you can be liable to tax in more than one place, however you get credited for the already tax paid if there is a teraty.
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Old 07.07.2011, 13:28
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Re: Tax upon return to UK?

So the net effect is that if there is a treaty, you don't ultimately pay twice (usually)?
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Old 07.07.2011, 13:31
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Re: Tax upon return to UK?

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We need more details, will the revenue believe you ever actually left the UK for tax as far as tax is concerned? Did you sell your house etc.

The absolute minimium would be 1 full tax year.

Hi,Thanks for your reply.
No we did not sell our house, and I am back and forth to the UK and stay in the house, paying council tax etc. I had a feeling it might be a full tax year. Thanks
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Old 07.07.2011, 13:33
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Re: Tax upon return to UK?

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So the net effect is that if there is a treaty, you don't ultimately pay twice (usually)?
You end up paying at the highest rate, also the OP should bear in mind that how gross taxable earnings is calculated is different in CH. Temporary absence from the UK does not exempt you from the UK's self assesment tax system
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Old 07.07.2011, 13:35
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Re: Tax upon return to UK?

I said that you cannot pay twice for the same thing where a treaty exists as it does between CH and UK. You said that this was incorrect.

But it isn't incorrect.

Everything else you say is correct though
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Old 07.07.2011, 13:37
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Re: Tax upon return to UK?

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That's incorrect, you can be liable to tax in more than one place, however you get credited for the already tax paid if there is a teraty.
Caviarchips- This is exactly how I understood the situation to be also,it was just the minimum period I wasn't sure of.

Thanks Fatmanfilms , yes you are right, I need to sit down property with a tax advisor, if anyone can recommend a good UK tax advisor, please let me know, cheers. :-)
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Old 07.07.2011, 13:40
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Re: Tax upon return to UK?

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Hi,Thanks for your reply.
No we did not sell our house, and I am back and forth to the UK and stay in the house, paying council tax etc. I had a feeling it might be a full tax year. Thanks
Sounds like you never left as far as HMRC are concerned. It's actually quite complicated, the move needs to appear 'permanant', staying in the house shows otherwise.

The UK tax you pay may depend on whether you're 'resident', 'ordinarily resident' or 'domiciled' in the UK. You can be more than one of these - or none.

http://www.hmrc.gov.uk/cnr/simple-gu...-residence.pdf

http://www.hmrc.gov.uk/cnr/hmrc6.pdf

"• Family ties include having a spouse, civil partner, children or other family
members you are close to, in the UK.
• Social ties include membership of clubs and societies and events that you
regularly attend or host. It also includes any regular recreational engagement,
such as returning each year for an annual sporting season.
• Business ties include owning or being a director of a business based in the
UK, or having employment, including self-employment, in the UK. Regular
employment duties in the UK are a tie and you need to consider the extent,
frequency and nature of those duties. It does not matter if the duties
themselves are not taxed, for example because of a DTA.
• Property ties include a house or apartment that you own or lease, or property
held primarily for investment but that also provides you with accommodation
when you are in the UK. A house or apartment provided for your use for the
duration of your time in the UK as part of an employment package is
‘available accommodation’ and is a tie to the UK."
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Old 07.07.2011, 13:43
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Re: Tax upon return to UK?

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I said that you cannot pay twice for the same thing where a treaty exists as it does between CH and UK. You said that this was incorrect.

But it isn't incorrect.

Everything else you say is correct though

You wrote 'so its unlikely that you will pay Swiss income tax and then UK income tax on the same earnings....'

Higher UK income tax could well be payable in addition to any Swiss tax paid.
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Old 07.07.2011, 13:49
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Re: Tax upon return to UK?

It's fairly easy to understand.

8 Departing from the UK
If you emigrate from the UK you will stop being resident here. This would
mean that you leave, set up home elsewhere, and substantially cut your ties to
the UK.
If you leave for shorter periods, for occasional residence abroad, or with no
settled purpose abroad, it is likely that you will remain resident in the UK –
even if you become resident in another country under that country’s rules.
8.1 Leaving the UK permanently or indefinitely
If you are leaving the UK permanently or indefinitely, either to work or for
another reason, you must tell us by contacting your tax office. We will give you
form P85 to complete so that you can get any tax refund you are owed. We
will also tell you if you will need to complete a UK tax return after you have
left the country.
Leaving the UK ‘permanently’ means that you are leaving the country to live
abroad and will not return here to live. Leaving ‘indefinitely’ means that you
are leaving to live abroad for a long time (at least three years) but you think
that you might eventually return to live here, although you do not currently
have plans to do so.
The act of leaving the UK does not necessarily make you not resident and not
ordinarily resident. You must also make a definite break from the UK and any
remaining ties you have with the UK must be consistent with not being resident
here. If you say that you are no longer resident and ordinarily resident in the
UK, we might ask you to give some evidence to show that you have left the UK
permanently or indefinitely and that there has been a clear change in the
pattern of your life. For example, we would expect you to show that when you
left the UK you had acquired accommodation abroad to live in as a permanent
home. If you still have property in the UK which you can use after you leave,
we might want you to explain how retaining that property is consistent with
leaving the UK.
You will not cease to be resident in the UK simply because you become resident
elsewhere. You can become resident in another country and remain resident in
the UK.
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Old 07.07.2011, 15:14
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Re: Tax upon return to UK?

A simple answer is given in the FAQ:
http://www.hmrc.gov.uk/cnr/faqs_general.htm#3nr

It defines "non-resident" for tax purposes as being away more than one complete tax year.
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Old 07.07.2011, 15:28
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Re: Tax upon return to UK?

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A simple answer is given in the FAQ:
http://www.hmrc.gov.uk/cnr/faqs_general.htm#3nr

It defines "non-resident" for tax purposes as being away more than one complete tax year.
It's the HMRC defination of 'leave' is the issue not 'being away', which is exactly why I have quoted rather morel from the HMRC.
There have been changes in the way they deal with ex-pats since a court case 18 months ago be very careful even the ¨Revenues guidence notes' were wrong!

Last edited by fatmanfilms; 07.07.2011 at 16:44. Reason: definition of leave
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Old 07.07.2011, 16:47
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Re: Tax upon return to UK?

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It's the HMRC defination of 'leave' is the issue not 'being away', which is exactly why I have quoted rather morel from the HMRC.
There have been changes in the way they deal with ex-pats since a court case 18 months ago be very careful even the ¨Revenues guidence notes' were wrong!
agreed. don't rely on hmrc guidance. in fact, this point came up in the court case itself!
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Old 07.07.2011, 16:59
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Re: Tax upon return to UK?

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agreed. don't rely on hmrc guidance. in fact, this point came up in the court case itself!
I stand corrected. I just remembered seeing this there a while back when I checked whether I should have somehow "deregistered" in the UK. Never got round to filling out that form anyway, and they didn't chase me yet, so maybe that info was not the most accurate either
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Old 07.07.2011, 17:10
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Re: Tax upon return to UK?

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I stand corrected. I just remembered seeing this there a while back when I checked whether I should have somehow "deregistered" in the UK. Never got round to filling out that form anyway, and they didn't chase me yet, so maybe that info was not the most accurate either
The UK tax system is self assessment, they wont chase you.
At some point they may decide to investigate your affairs, if they believe you are still resident they will issue a tax assesment with fines & interest.
By not filling in the form, it's reasonably clear that you did not intend to leave permanantly or indeffinately. You have to actively show you have 'left'.
If your earnings only make you a UK basic rate tax payer I doubt they would ever be interested, however there is a large budget shortfall in the UK, ExPats who have not bothered to 'leave' permantly or indeffinately are easy targets.
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