How to pay tax on money earned abroad

[reubenjones]

Hi guys I'm having some issues filing my tax return because I worked in Australia and the UK during the 2015-2016 tax year.

I understand that I have to pay UK tax on the money I earned whilst in Australia but I don't know how to declare it because I only know how much I earned in Australian Dollars and the online form requires the declaration in Pound Stering.

The vast majority of money I earned in Australia was spent there and the USA and was not transferred to an English account so I can't just use an amount from a UK bank statement.

I'm also confused about remittance - do I only need to pay tax on income/assets actually brought into the UK?

I didn't earn enough to pay tax in Australia but I did complete tax returns there. I assume this means I am not eligible for foreign tax relief?

Any input is greatly appreciated. Thanks!

[jason13]

From your other post, it seems you were in Australia from approximately March to September 2015. This means that split year treatment would not apply. Therefore, everything you earned in Australia is taxable in the UK (regardless of whether you spent it in Australia or brought it to the UK).

You can look up historical conversation rates on a site like XE.com or oanda.com and convert your Australian income to GBP.

Since you didn't pay tax in Australia, there's no foreign tax relief to claim.

(Just for completeness sake, there is something called the 'remittance basis' but it's not clear whether you qualify and even if you did the amount you earned in Australia is not high enough to make it worthwhile. i.e. you have to declare all Australian income.)

[reubenjones]

Hi, thanks for the reply

When converting currencies what date would I use for the conversion rate? Ie work start date/ finish date or maybe a mean value for the tax year in question?

[bd6759]

Strictly you should use the spot rate on each pay day, but you may get away using a yearly average if the rates were generally stable.

[reubenjones]

It wasn't really possible to do that because my employers were terrible at giving me payslips so I calculated an average for the period I was employed and noted that it was an estimate in the tax return. Thanks for your help