Working Abroad and Taxation

Summary: If you leave the UK to work abroad full time you will drop your UK residence and UK ordinary residence status for tax purposes if you fulfil the following criteria...

If you leave the UK to work abroad full time you will drop your UK residence and UK ordinary residence status for tax purposes if you fulfil the following criteria: -

- All the work you do is performed abroad.

- If you do have to perform duties in the UK, they are purely incidental to your overseas employment.

- You are away from the UK for at least one complete tax year.

- If you return to the UK to visit, your visit in any one tax year must be less than 183 days (roughly 6 months).

- Or, if you return to the UK to visit regularly, the visits must not average more than 90 days a year per tax year.  This rule applies for a maximum of the first four tax years after leaving the UK.

If you satisfy the above criteria your non UK resident and non UK ordinary resident status will be applicable the day after you depart and if your spouse accompanies you, it will apply to him/her as well.

If you are living abroad or are considering moving abroad to work, we suggest you get as much information about the practicalities of finding work in your chosen country as possible before you go.  To that end, before we begin to discuss working abroad and UK taxation further, we recommend you check out this book at some stage:-

Working Abroad: The Complete Guide to Overseas Employment

Godfrey Golzen, Jonathan Reuvid

This immensely popular book is packed with information for anyone considering working abroad.

It provides country-by-country profiles which outline the key issues such as the economies, working conditions and taxation systems of all major areas: Europe, North and South America, Australasia, Asia, Africa and the Middle East.

Written in an easy-to-read style, it also contains numerous addresses for further information and advice. This completely revised new edition includes a directory of useful e-mail addresses. 

Click here to order a copy directly from Amazon!

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Income Tax

By satisfying the above detailed criteria and losing your UK resident status any income you earn from your overseas work whilst abroad will remain 100% free from UK income tax.

Obviously your income will be subject to income tax liability in your new country of residence and care should be taken that you are not jumping out of the frying pan and into the fire.  Many of the main European countries levy high income tax, and higher rate income tax can be levied up to 60% in countries such as the Netherlands and Denmark for example.

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