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Do I need to pay US income tax on foreign (UK) earned income?

Do I need to pay tax on oversea income in the UK?

  • Currently I am uk domicled and residence in the UK (lived here all my live). Next year I plan to move aboard to work for an oversea employer for a year. WOuld I remain domicled in the UK but become a non-residence for that year as i would leave the UK for more than 6 months in the tax year. I will get taxed on my salary aboard. When i bring the money (net of tax) back into the UK-will i be taxed again? If not, do i need to declare this on self assessment? Thanks

  • Answer:

    You'll be not resident but ordinarily resident. You have to leave the UK for a complete tax year to change your residence status. Unless you do this you'll still pay tax in the UK. You will not change your domicile Yes you must declare it on your tax return and you'll pay UK tax on the income with a deduction for foreign tax paid. See IR211 on the HMRC site

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There are a variety of ways to deal with this. The direct method is to declare yourself as temporarily resident overseas, for taxation, before you go. This, however, can cause all sorts of intrusions into your banking affairs by the tax man. I did this once only. The remainder of contracts, I used an accountancy, which specialised in offshore earnings. It cost me 9% of my earnings, but everything was kosher and properly audited for the taxman. The only thing I had to do was to ensure my sojourns in Blighty added up to less than 3 months in any tax year! If you need a trustworthy contact, then e-mail me through the webmaster.

Bob P

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