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Where Taxpayers and Advisers Meet

Temporary placement in Hong Kong

andy4851
Posts:80
Joined:Wed Aug 06, 2008 3:40 pm

Postby andy4851 » Sun Oct 19, 2008 8:22 pm

Hi,

I have a friend who has just gone to work in HK for a bank.
He is on a 6 month contract to take him to March and then will be on a 2 year contract from then on with the view to coming home to the UK at the end of 2.5 years.

He will not be in the UK for more than 90 days each year, other than the 6 months he has been in the UK for this tax year.

My question is how will HMRC view his HK earnings over the next 2.5 years and will he eventually be taxed here in the UK at all?

Any help or guidance to some reference material I can use would be greatly appreciated.

Kind regards

Andy

JSK TAXATION
Posts:200
Joined:Wed Aug 06, 2008 2:18 pm

Postby JSK TAXATION » Mon Oct 20, 2008 12:30 pm

AndyF

Provided your friend is absent from the UK for a period spanning at least one complete tax year then in normal circumstances he should be treated as not resident and not ordinarily resident in the UK from the date he leaves to the date he returns back (provided he meets the visiting rules during the period of absence).

The one issue that perhaps ought to be clarified is the break in contracts. Provided the employment is full time and there is to all intents and purposes a seamless transition from one contract to the next, he should be NR/NOR as from the day he first leaves the UK rather than the day the second contract commences.

HMRC publication IR20 will provide the basics for this situation, but be careful not to rely on it completely as recently HMRC has deviated from their stated practice when it apparently suits them to do so!

If I can help further, please let me know.

John S King
Chartered Tax Adviser
www.taxation-advice.com
John S King
Chartered Tax Adviser
e: help@taxation-advice.com
w: http://www.taxation-advice.com
01732 897850

tax me less!
Posts:983
Joined:Wed Aug 06, 2008 3:29 pm

Postby tax me less! » Mon Oct 20, 2008 7:14 pm

It is customary in high cost locations to be offered tax protection or tax equalisation. If this is on the table then the individual may have different options from the "norm".


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