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Where Taxpayers and Advisers Meet
Tax implications of money in Offshore account
I left the UK to work in Ireland hoping to stay a full tax year out of the UK. Money was paid into euro offshore account. However the contract ended after 6 months and I returned to the UK. Do I have to pay income tax on the full amount in offshore account or only on money remitted to the UK ( none as money still in account). If the amount is in euros what exchange rate is used to calculate tax in sterling.
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raymondr@emwlaw.com
- Posts:18
- Joined:Wed Aug 06, 2008 3:09 pm
Er, no?
Your first sentence is heading in the right direction: if you'd been out working full time for a complete tax year, then your earnings would normally escape UK tax. However, you haven't satisfied this test, and you're taxable in the UK on your worldwide earnings, as and when you earn them.
I suggest you d/l http://www.inlandrevenue.gov.uk/pdfs/ir20.pdf
and have a look at the parts 2 and 5, and 6 if you're considering bank interest.
I am struggling to see how the remittance basis applies. Note the issue of domicile is not relevant where the employer is resident in Eire.
I should think that you apply normal UK tax law to the overseas earnings: you are deemed to earn your employed income on the earlier of when you are paid or it is contractually due to you, and you should apply the exchange rate that was in force, presumably on your normal pay day for each salary payment made.
Hope this helps, but I am not sure it is what you wanted to hear.
Your first sentence is heading in the right direction: if you'd been out working full time for a complete tax year, then your earnings would normally escape UK tax. However, you haven't satisfied this test, and you're taxable in the UK on your worldwide earnings, as and when you earn them.
I suggest you d/l http://www.inlandrevenue.gov.uk/pdfs/ir20.pdf
and have a look at the parts 2 and 5, and 6 if you're considering bank interest.
I am struggling to see how the remittance basis applies. Note the issue of domicile is not relevant where the employer is resident in Eire.
I should think that you apply normal UK tax law to the overseas earnings: you are deemed to earn your employed income on the earlier of when you are paid or it is contractually due to you, and you should apply the exchange rate that was in force, presumably on your normal pay day for each salary payment made.
Hope this helps, but I am not sure it is what you wanted to hear.
Is it true that if you are earning money outside of the UK and getting paid into an offshore account, you do not have to pay income tax? I have read about the 91 day rule etc, but someone has told me if your money is not entering the UK that legally you can not be taxed on it. It sounds great but is it right? Greatful of any help on the matter.