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Sending salary back to the UK - how would this work?

(8 Posts)
hollynmistletoe Tue 23-Dec-14 14:55:31

DH and I are both expats from Oz living and working in the UK for many years, both UK taxpayers.

DH has the chance of a job back in Oz for a couple of years, with an Australian company. If all goes well, DC and I may look to join him, but we have reasons for not wanting to disrupt DC's schooling just now, so it makes more sense initially for DC and I to stay in the UK and for DH to go alone. However we would need to be able to use part of his salary to pay our mortgage, as I couldn't cover it from my salary alone.

Does anyone know how this work in terms of tax, etc? Would he have to pay tax in Oz and again in the UK when he transferred the money to a UK account? I've searched online but can't find any clear information on this so any advice would be much appreciated.

TarkaTheOtter Tue 23-Dec-14 15:00:00

No he wouldn't need to pay tax at that point afaik. We do this the other way as dh is paid in the UK but we live abroad. We use a company called Global Reach Partners to do the transfer because their exchange rates are MUCH better than our bank. Lots of other similar companies so search around as it makes a big difference.

riksti Tue 23-Dec-14 15:01:23

No, he wouldn't pay tax twice but the money may get taxed on both countries with credit available for tax deducted in Australia (as the country of the employer they would have first go at taxing the money). Your problem comes from the residence rules the uk uses to establish whether your income should be taxable in the uk. They are quite complex and depend (among other things) how long he is going to be working in Australia and whether it's a full-time job as per HMRC's definition.

riksti Tue 23-Dec-14 15:05:02

tools.hmrc.gov.uk/rift/screen/SRT+-+Combined/en-GB/summary?user=guest

This will give you an idea whether HMRC would consider your DH tax resident in the UK.

hollynmistletoe Tue 23-Dec-14 15:20:21

Thanks for the quick responses.

Tarka I hadn't realised there were companies that would do the transfer, will look into this further.

riksti looking at those guidelines I think he would be non-resident in the UK for tax purposes, as he would be employed in a full-time job with a contract extending for more than a year.

I hadn't realised it would be quite so complicated confused. It might be simpler to go with him after all!

EsmeGruntFuttock Tue 23-Dec-14 16:24:08

Be very careful with this. We were living abroad for a year and due to school issues myself and our 2 DCs returned to the UK 6 months ahead of DH. Because he had dependants living the UK for that period he was liable for tax here in the UK, and was also paying it in Asia. We knew this would be the case and had little choice at the time. But 18 months on and it is still a nightmare tbh. Thankfully his company have appointed companies in both countries to get to the bottom of it all, at their expense, but it has been very complicated and very stressful. At one point recently we were looking at a tax bill in the UK of several tens of thousands of pounds. However, taking into account reciprocal tax laws and tax paid abroad that has come down significantly.

Just be careful that you know what you're getting into and what your liabilities will be. Have to say that HMRC is another reason we would bugger off abroad again.

TarkaTheOtter Tue 23-Dec-14 17:01:38

But all of that applies regardless of whether they transfer the money back to the UK, right? Transferring the money in itself should not cause it to be taxed.

EsmeGruntFuttock Tue 23-Dec-14 17:42:54

Yes you are right Tarka. I was trying to just warn about having dependants in the UK whilst working abroad generally and the tax implications. Even if it evens out in the end, there are often cash flow issues around having to pay two tax bills for the same period whilst HMRC sorts out what you actually owe. As I said, 18 months in and this is still ongoing for us.

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