Online tax test for British expats in the UAE

A new online test promises to help British UAE residents avoid nasty surprises from the tax man.

British expatriates can avoid nasty surprises from the taxman by filling in an online form.

The residence test will assess how much tax they owe in the UK.

For most, there will be no change – Britons permanently residing overseas do not, as a rule, pay income tax in the UK.

But some have more complex circumstances, and the service aims to clarify their position.

According to HM Revenue and Customs (HMRC): “It has always been necessary for an individual who has UK liability to income or capital gains tax to notify HMRC if they have not received a tax return for the year unless they have no UK gains and all such income has been taxed at source.”

The new process is known as the statutory residence test (SRT).

“A key factor is whether the individual is UK resident,” said HMRC. “If so, they will be liable on their worldwide income and gains. If non-resident they will need to notify HMRC if they have untaxed UK income.”

The SRT was introduced this month. Taxation was previously governed by case law and common practice.

The online form, expected to be launched within weeks, will have  questions about how many days people have spent in the UK or if they own property there, to determine their residence status.

It will be available at www.hmrc.gov.uk/calcs-tools/residence-indicator.htm