Personal allowances for non-residents

by **lsp54** on Tue Sep 15, 2009 5:25 pm

I have a US citizen client who visits the UK but is non-resident. He has employment income in the UK. Does he qualify for personal allowances. I have spent considerable time looking this up, but am still not clear. I would be very grateful for clarification.
Please help.
Many thanks.

by **maths** on Tue Sep 15, 2009 7:27 pm

USA citizens but non-UK resident do not qualify for UK personal allowances under domestic law.

Furthermore,the UK/USA double tax treaty does not require HMRC to grant such allowances.

by **lsp54** on Tue Sep 15, 2009 7:34 pm

Thank you very much indeed. When a client thinks differently you begin to doubt yourself.
This is a great forum.
Thanks again.

by **maths** on Tue Sep 15, 2009 7:36 pm

Why does the client think he is entitled to a personal allowance?

by **lsp54** on Tue Sep 15, 2009 7:41 pm

Because he was given full allowances in his tax code, and if he isn't entitled to them, then he has a sizeable tax bill to pay when preparing his tax return. This isn't going down well. He hasn't given me a technical reason why he should get the allowances.
Thanks for this discussion.

by **maths** on Tue Sep 15, 2009 7:49 pm

You could call the Centre for Non-Residents and see what they say.

The UK/USA DTA (Artcile 25 i think) does not require HMRC to grant personal allowances whereas some other DTAs do.

My experience is that where there is no legal requirement then none are granted. Centre for NR may disagree with me.

by **lsp54** on Tue Sep 15, 2009 8:09 pm

Thank you, I will give them a call. The reason that he has been given allowances by the tax office is that he was resident until December 2007, so was entitled to allowances in 2007/2008, but then moved back to the US permanently, except for the short visits.
Thanks again

by **maths** on Tue Sep 15, 2009 8:12 pm

My pleasure; please let me know the outcome.

by **lsp54** on Tue Sep 15, 2009 8:18 pm

I have sent them an email so probably won't get a response for some time. I will be sure to let you know what they say.
Thanks.

by **lsp54** on Wed Sep 30, 2009 6:23 pm

I got a reply from the HMRC Residency about personal allowances for a US citizen not resident in the UK. He cannot get UK personal allowances against UK sourced income. Of course we should always query whether the taxpayer has citizenship elsewhere as well, in case this changes the situation. Thank you to the forum for your support. I look forward to using it in the future.
Thanks especially to maths.