This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Turks and Caicos

londontax88
Posts: 3
Joined: Tue Jun 18, 2019 8:53 pm

Turks and Caicos

Postby londontax88 » Tue Jun 18, 2019 9:31 pm

I have been offered a 2-year contract in Turks and Caicos, due to head out there in November this year.

I plan to return to the UK at the end of that contract.

The big draw for me is that there is no income tax in the UK. I am planning to send money back to my parents whilst I am working in Turks & Caicos to pay off money that I owe them.

Would I have to pay any tax on money I send back?

When I return to the UK in November 2021, will I have to pay tax on any of the income earned while I was away when I transfer it back to a UK account?

Also, should I continue to pay national insurance contributions while I am away as I have a pension built up which I intend to pay into again once I am back in the UK?

Many thanks

darthblingbling
Posts: 280
Joined: Wed Aug 02, 2017 9:09 pm

Re: Turks and Caicos

Postby darthblingbling » Wed Jun 19, 2019 8:03 am

Seeing as you're leaving the UK for 2 years it's a fair assumption that you will be considered non resident for tax purposes for the period away (assuming split year applies for both the year away and year returning)

If so, then income arising outside the UK will not be taxable in the UK. I don't believe the temporary non resident rules apply to employment income so assuming you have do no work physically in the UK during this period the employment income shouldn't be taxable in the UK.

Read up on RDR3 (Google it) and confirm your residency position.

With regards to National Insurance, you will not be liable to Class 1 NI, but it may be possible to make voluntary Class 2 contributions if you're eligible in order to earn credits for the years of non residency.

londontax88
Posts: 3
Joined: Tue Jun 18, 2019 8:53 pm

Re: Turks and Caicos

Postby londontax88 » Wed Jun 19, 2019 2:33 pm

Seeing as you're leaving the UK for 2 years it's a fair assumption that you will be considered non resident for tax purposes for the period away (assuming split year applies for both the year away and year returning)

If so, then income arising outside the UK will not be taxable in the UK. I don't believe the temporary non resident rules apply to employment income so assuming you have do no work physically in the UK during this period the employment income shouldn't be taxable in the UK.

Read up on RDR3 (Google it) and confirm your residency position.

With regards to National Insurance, you will not be liable to Class 1 NI, but it may be possible to make voluntary Class 2 contributions if you're eligible in order to earn credits for the years of non residency.
Thanks @darthblingbling

I had a look at RDR3 and is very lengthy and confusing!! I think I would qualify for split year as would probably be in the UK for less than 2 weeks per year and won't be working here at all.

Is there any liability when sending money back to a UK bank account at all?

Thanks in advance

hendersontax
Posts: 28
Joined: Wed Jun 19, 2019 5:04 pm
Location: Manchester
Contact:

Re: Turks and Caicos

Postby hendersontax » Wed Jun 19, 2019 6:23 pm

If you have earnings for non-UK duties performed while non-resident in the UK, these will not be taxable in the UK irrespective of whether or not you send them to the UK during or after your contract. The only case where sending money back to the UK might be an issue is where you have earnings which are taxable on remittance, but this won't apply if you are UK domiciled.

It does sound like you will be non-resident in the UK for 2020/21 (under the first or third automatic overseas test) and likely eligible for split-year treatment under Case 1 for 2019/20 and Case 6 for 2021/22. Hope that allows you to make a bit of sense of RDR3! So provided your duties under the overseas contract are wholly carried overseas during either the overseas part of a split year or while you are non-resident in the UK, they will not be taxable in the UK.

Provided the contract is with a non-UK employer (that is, you are not being seconded overseas while remaining with a UK employer) then you should not be liable for Class 1 NIC but whether or not it is a good idea to pay voluntary contributions will depend on what benefit entitlement you wish to accrue - see page 11 onwards of https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759966/NI38.pdf. In particular, note that 35 years of NIC contributions will give you a full UK state pension so it may not be worthwhile to pay any more if you expect to have this number of years of contributions anyway by the time you reach UK state pension age.

Hope that helps.
Tom Henderson ATT CTA
Henderson Tax Consulting
www.hendersontax.co.uk

londontax88
Posts: 3
Joined: Tue Jun 18, 2019 8:53 pm

Re: Turks and Caicos

Postby londontax88 » Wed Jun 19, 2019 11:49 pm

If you have earnings for non-UK duties performed while non-resident in the UK, these will not be taxable in the UK irrespective of whether or not you send them to the UK during or after your contract. The only case where sending money back to the UK might be an issue is where you have earnings which are taxable on remittance, but this won't apply if you are UK domiciled.

It does sound like you will be non-resident in the UK for 2020/21 (under the first or third automatic overseas test) and likely eligible for split-year treatment under Case 1 for 2019/20 and Case 6 for 2021/22. Hope that allows you to make a bit of sense of RDR3! So provided your duties under the overseas contract are wholly carried overseas during either the overseas part of a split year or while you are non-resident in the UK, they will not be taxable in the UK.

Provided the contract is with a non-UK employer (that is, you are not being seconded overseas while remaining with a UK employer) then you should not be liable for Class 1 NIC but whether or not it is a good idea to pay voluntary contributions will depend on what benefit entitlement you wish to accrue - see page 11 onwards of https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759966/NI38.pdf. In particular, note that 35 years of NIC contributions will give you a full UK state pension so it may not be worthwhile to pay any more if you expect to have this number of years of contributions anyway by the time you reach UK state pension age.

Hope that helps.
Thank you so much!


Return to “International Tax”