Dubai and tax status

[steve singh]

Hello,

Quick question, which I'm sure someone on here has already got an answer to.

If I work in Dubai, but as a UK citizen, and earn a "tax-free" salary, what is the tax implication once I return to the UK?

I tried to google but virtually everything is blocked at work !

Thanks in advance

[auditt]

As lng as the money stays offshore im under the impression no TAX is paid on this income but i could be totally wrong.

Time to pay Mr Tax Specialist a visit

[Eric Mc]

steve singh said:

Hello,

Quick question, which I'm sure someone on here has already got an answer to.

If I work in Dubai, but as a UK citizen, and earn a "tax-free" salary, what is the tax implication once I return to the UK?

I tried to google but virtually everything is blocked at work !

Thanks in advance

If you stay outside the UK for an entire tax year (i.e. from 6 April to the following 5 April, you will be deemed to be a non-UK tax resident for that tax year. Any income you earned abroad in that tax year will not be subject to UK tax. If you eventually transfer that money into a UK bank account, you will still not be subject to UK tax on the money transferred. You will be subject to UK tax on any interest credited to that capital sum after it has been deposited in the UK bank.

You can return to the UK for short work and family related visits without losing your non-UK Tax Resident status.

The rules on Tax Residency can be quite complex as there are all sorts of permutations possible and it is always advisable to get full advice from a foreign residency tax expert before making any commitments to what to do with money earned working abroad.

[steve singh]

Thanks Eric that is really helpful

[LC23]

I am an international personal tax residency "expert"! Can confirm that the basics of Eric's email are correct but please do get advice on your specfic circumstances if you are in any doubt.

Just to add however that you will be non UK tax resident for the entire period you are outside the UK, provided that you have that full UK tax year abroad in that period. For example, if you leave the UK on 25 September 2010 and work full time abroad until 31 August 2012, you will be non UK tax resident from 26 Sept 2010 to 30 Aug 2012. Any income earned for the duties performed abroad in that period will not be liable to UK inccome tax.

Edited by LC23 on Thursday 23 September 16:54

[steve singh]

Thanks LC23