We assist our clients for UK tax return filings for individuals, offshore and onshore companies. UK tax returns are required when UK sourced income arises. Certain non-resident individuals or companies must file a UK tax return when they receive income, such as rental income, UK pension, or trading profits that are deemed to arise in the UK.
The main forms of UK tax related to individuals are as follows:
- Income tax, depending on your residency and domicile and on the type of income (see below).
- Capital gains tax, depending on your residency and domicile.
- Inheritance tax, depending on your domicile and the location of the asset.
The UK provides many general exemptions from UK tax for non-residents, or, when resident, to non-domiciled people. However, such exemptions do not apply to UK sourced income, such as rental income on UK properties, or receipts from UK pension schemes, etc. In addition, there are several anti-avoidance measures for people who become non UK resident for a short period (less than 5 full tax years) such as:
- Dividends received from a close company (one owned by 5 or fewer people); and
- Receipts from life insurance policies and lump sums from pension schemes.
- Capital Gains arising.
Inheritance tax (mainly being a tax on death) depends on domicile and location of the asset. For UK domiciled people, location does not matter as you are taxed on your worldwide assets. For non-domiciled people, then only UK assets are taxed. The Inheritance Tax rate is high, but there are several inheritance planning opportunities to help reduce this tax, if taken with sufficient time.
UK Tax Compliance
The UK year runs to 5 April each year. A tax return is required to be completed annually where UK sourced income or capital gains arises. For individuals and non UK companies the deadline for filing the return is 31 October each year if doing a paper return, or 31 January if filing online.
A UK Tax Return will be required where a Non Resident Individual or Company has UK sourced income, such as:
- Rental income from UK Properties owned solely or jointly.
- UK pension received.
- UK income or gains where you left the UK or returned to the UK mid tax year.
- Trading profits that arise in or are deemed to arise in the UK.
- Employment services rendered in the UK for a UK resident individual.
UK Tax Advice
Businesses and individuals can gain from tax planning, for example, when they are planning to go to the UK to live and/or work, or where a SE Asian company wishes to invest in or trade with the UK. The kinds of issues that commonly arise are:
- Setting up a company or branch in the UK and understanding the tax implications.
- What does my employee need to consider before I send them to the UK to work?
- Is my Hong Kong company liable to UK tax because of the business we do there?
- When investing in the UK or out from the UK, how can I make use of treaties to mitigate tax?
Domicile and Residency Issues
Typical questions our clients ask are:
- How many days can be spent in the UK before I risk becoming UK resident and so taxable in the UK?
- What if I work for some days in UK? Will the UK Revenue Authorities want to tax me in the UK on the work I do there?
- What should I do if my company seconds me to work in the UK?
- What should I do if my UK employer seconds me to work in SE Asia?
- How can I provide adequately for my children when UK Inheritance Tax may hit at almost 40% of my wealth?
- How can I be sure what my domicile is and how can it be changed?