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Where Taxpayers and Advisers Meet

Working abroad, Dual Nationality

simoncdl
Posts: 4
Joined: Fri Nov 20, 2015 6:27 pm

Working abroad, Dual Nationality

Postby simoncdl » Fri Nov 20, 2015 7:20 pm

I was born in Uk and am currently living in the UK. I am also a naturalised US citizen and passport holder through marriage, now divorced. I returned to the UK in 2007 after nearly ten years in the US and have since re- married here.
I have an opportunity to work in the middle east for a US company. Am I liable for UK tax on my return if I work there as a US citizen on my US passport. I'm not sure show when I'm going (sometime between now and April is my best guess) or returning or how long I will be there.

nikkisizer
Posts: 342
Joined: Fri Nov 04, 2011 5:26 pm
Contact:

Re: Working abroad, Dual Nationality

Postby nikkisizer » Sat Nov 21, 2015 6:30 am

I'm not sure show when I'm going (sometime between now and April is my best guess) or returning or how long I will be there.
Hello simoncdl,

Based on the information given above it is impossible to answer whether or not you would be liable for UK tax on your return to the UK.

Residency is a complex area. Your personal circumstances would need to be looked at in much more detail as ties such as home, work, family etc. in the UK, the number of days you visit the UK, may class you as UK resident for tax purposes regardless of where you reside.

If classed as UK resident you would then be taxed on your worldwide income so it is very important that your individual circumstances are dealt with correctly to protect your residency status and exposure to UK taxation.

Happy to help if required so if you need any further assistance please do not hesitate to contact me.
Kind regards,

Nikki Sizer

Sizer & Co Accountants
nikki@sizeraccountants.com
[url]http://www.sizeraccountants.com[/url]

Birmingham - London - Manchester - Leeds

nikkisizer
Posts: 342
Joined: Fri Nov 04, 2011 5:26 pm
Contact:

Re: Working abroad, Dual Nationality

Postby nikkisizer » Sat Nov 21, 2015 6:36 am

Am I liable for UK tax on my return if I work there as a US citizen on my US passport.
Also, further to my below post, if you decide to work in the Middle East on your US passport instead of your UK passport you would need to consider the implications of USA taxation.
Kind regards,

Nikki Sizer

Sizer & Co Accountants
nikki@sizeraccountants.com
[url]http://www.sizeraccountants.com[/url]

Birmingham - London - Manchester - Leeds

simoncdl
Posts: 4
Joined: Fri Nov 20, 2015 6:27 pm

Re: Working abroad, Dual Nationality

Postby simoncdl » Sat Nov 21, 2015 10:06 am

Hi Nikki, many thanks for reply. It does seem a lot more complicated than I had first thought.
Since returning to the UK in 2007 I have resided here. My wife and I currently rent which is the reason I'm going out there to earn money for a house. It is just the two of us, no children.
If it means I have to stay out of the UK for 12 months then I can do that if it will help. I currently work in the UK on PAYE and the job has nothing to do with the middle east job. I will have to do the middle east job on my US passport as they are not accepting applicants from outside the US.
I would be paid into my UK bank account but I wonder if it would be more beneficial to be paid into a US bank account and then bring the money across.
The tax situation with the US is basically tax free as a US citizen providing I stay out of the US for 330 out of 365 days. This won't be a problem either. The money isn't a fantastic amount but I really need to know if it's going to be worth my while staying away or how long I should stay away if necessary
I appreciate your help in this.

maths
Posts: 7630
Joined: Wed Aug 06, 2008 3:25 pm

Re: Working abroad, Dual Nationality

Postby maths » Sat Nov 21, 2015 1:37 pm

The passport issue is irrelevant to your exposure to UK tax.

Whilst working outside the UK your earnings will not be exposed to UK tax assuming that at that time you are not resident in the UK.

This requires that you spend less than 16 days back in the UK in the tax year or you satisfy the third automatic overseas test which requires you to work effectively full time overseas for the tax year.

DavidTreitel
Posts: 213
Joined: Thu Aug 16, 2012 4:31 pm

Re: Working abroad, Dual Nationality

Postby DavidTreitel » Sat Nov 21, 2015 6:20 pm

It is a common misconception that US citizens qualify to claim the foreign earned income exclusion when working on a temporary basis in the Middle East. You would need to have a foreign tax home and meet either the bona fide residence test or the physical presence test.

You might owe the Healthcare tax or some US income tax; which could potentially be ameliorated by using excess foreign tax credits.

simoncdl
Posts: 4
Joined: Fri Nov 20, 2015 6:27 pm

Re: Working abroad, Dual Nationality

Postby simoncdl » Sat Nov 21, 2015 7:28 pm

All and any advice appreciated.
David. As i'll be working as a US citizen i will be paying social security and medicare. I can file my taxes in the US but as long as I am out of the country for 330 out of 365 days I know i'm ok.

Maths. I am a resident (born here and now living here) of the UK. From what you are saying would I be right in thinking that I will be subject to UK tax laws regardless of how long I stay out of the country as I am a UK resident

David. It is a common misconception that US citizens qualify to claim the foreign earned income exclusion when working on a temporary basis in the Middle East. You would need to have a foreign tax home and meet either the bona fide residence test or the physical presence test.

You might owe the Healthcare tax or some US income tax; which could potentially be ameliorated by using excess foreign tax credits.


Maths. The passport issue is irrelevant to your exposure to UK tax.

Whilst working outside the UK your earnings will not be exposed to UK tax assuming that at that time you are not resident in the UK.

This requires that you spend less than 16 days back in the UK in the tax year or you satisfy the third automatic overseas test which requires you to work effectively full time overseas for the tax year.

maths
Posts: 7630
Joined: Wed Aug 06, 2008 3:25 pm

Re: Working abroad, Dual Nationality

Postby maths » Sun Nov 22, 2015 12:22 am

Maths. I am a resident (born here and now living here) of the UK. From what you are saying would I be right in thinking that I will be subject to UK tax laws regardless of how long I stay out of the country as I am a UK resident
You seem to have completely misunderstood my post as I was saying quite the reverse, namely, it is highly likely that you would be working full-time overseas
and as a consequence could become not resident in the UK and thus avoid an income tax charge on your overseas work earnings.

DavidTreitel
Posts: 213
Joined: Thu Aug 16, 2012 4:31 pm

Re: Working abroad, Dual Nationality

Postby DavidTreitel » Sun Nov 22, 2015 11:11 am

All and any advice appreciated.
David. As i'll be working as a US citizen i will be paying social security and medicare. I can file my taxes in the US but as long as I am out of the country for 330 out of 365 days I know i'm ok.
.
Interesting - but that is not how US law works. In which country will you have a foreign tax home?

simoncdl
Posts: 4
Joined: Fri Nov 20, 2015 6:27 pm

Re: Working abroad, Dual Nationality

Postby simoncdl » Sun Nov 22, 2015 6:55 pm

Maths. I probably have misunderstood your post, I've been told that the new tax laws are complicated so imagine what it's like for people like me who have zero understanding :)
OK, so there's a chance that as I'll be residing in another country (somewhere in the middle east) that I would not be liable for UK tax upon my return. Sounds good to me but I was also told that it can depend on the amount of time away and if that time involves part of a tax year. If you can shine any light on that I'd appreciate it

David. That's what I was told by an American friend of mine although to be fair that was some time ago and things could have changed.


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