Are you moving to the UK to work?
If you are, then you are likely to have to pay income tax in the UK. The tax you pay depends on two main factors: how long you plan to remain in the UK and whether you intend to live here permanently.
1. Residence and Domicile
The income tax that you will pay in the UK depends on whether you are ‘resident’, ‘ordinarily resident’ or ‘domiciled’ in the UK. It is possible to fall into more than one – or indeed none – of these categories.
You are classed as a ‘resident’ for tax purposes if:
- You are in the UK for 183 days or more in a tax year
- You come to the UK to live permanently or for at least three years
- You are in the UK for an average of 91 days or more in a tax year (worked out over a maximum of four consecutive tax years)
If you are resident in the UK year after year you will normally be treated as ‘ordinarily resident’. If it is clear on your arrival that you intend to stat for at least three years then you will be treated as ‘ordinarily resident’ from the date of your arrival.
Your domicile is normally acquired at birth. However, ‘domicile’ is a more complicated issue and covers a range of factors.
2. What you will pay income tax on if you are resident and ordinarily resident
If you are both ‘resident’ and ‘ordinarily resident’ for tax purposes you will pay income tax on all the work you do in the UK, all UK pensions and all your UK investments. If you are also ‘UK domiciled’ you will also pay tax on all your overseas income.
If you are not ‘UK domiciled’ you will usually pay tax only on overseas income that you bring into the UK. However, you will pay tax on all your earnings if you work overseas for a UK employer and on all your earnings if you work in the UK for an overseas employer.
There are special tax allowances for seafarers who spend long periods outside the UK and people who receive overseas pensions. Contact your Tax Office for more details.
3. What you will pay income tax on if you are resident but NOT ordinarily resident
If you are ‘resident’ but not ‘ordinarily resident’ you will pay tax on all your UK income. You will usually only pay tax on overseas income you bring into the UK. In addition, you will pay tax on earnings for work done abroad that you bring into the UK.
4. What you will pay income tax on if you are NOT resident
If you are not a resident for tax purposes, you will still pay tax on your income from work you do in the UK, any UK pensions and all UK investments. You’ll also pay tax on any rental income you receive from a UK property.
However, you won’t pay tax on your overseas income even if you bring it into the UK.
5. What happens if you arrive in the UK part way through a tax year
When you come to the UK part way through a tax year you’ll normally only pay tax on income you receive after you arrive. This assumes that you are coming here to live permanently (or for at least two years) and you were not ‘ordinarily resident’ in the UK before you arrived.