Top Ten Expatriate Financial Questions


Do civil servants face taxes when working abroad?

Civil servants working abroad would be exempt from capital gains tax as long they are already established as non-residents. However they would be required to stay away for at least five years or the sum may be charged upon their return. In terms of income tax if their work requirements took place abroad then they will be exempt from UK tax BUT as a UK Crown servant their duties abroad would be classed as UK duties regardless of where they are conducted so in turn they would have to pay the income tax.

Do I pay National Insurance if working abroad?

If you are working abroad then you will have to pay NICs during your first year if you fall under the following categories: you are a UK resident, your employer has a branch in the UK and you were a UK resident in the time leading up to your new job.

Can I become a non resident by working abroad?

Simply working abroad does not class you as a non-resident, it is dependent on how long you stay away from the UK and what kind of work you will be doing. If you have an employment contract that lasts for at least the duration of a tax year and you return to the UK sparsely, 90 days or less, then you can indeed achieve non-residence status.

Could there be a scenario where I am charged double tax?

If you are working abroad but are still classed as a UK resident then yes you could be double taxed. To avoid this unwelcome situation the best thing to do would be to try and become a non-resident. Another option would be to look into a double tax treaty. Many countries have such agreements in place to avoid individuals receiving unfair tax bills.

What happens to share options if I become a non-resident?

If you were granted the share options whilst classed as a resident then you will have to pay income tax on any value increase the options reap, even if you have become a non-resident since then.

Do I avoid UK tax if I’m employed by an overseas company?

To avoid UK tax you must first become a non-resident, even if you are working in another country. UK residents are taxed on income worldwide, so you would have to apply and meet the non-residency requirements.

Are UK bonuses subject to tax after I become a non-resident?

Normally any bonuses that are paid after your employment period has ended are subject to income tax. Even if the bonus is paid whilst you are working in another country it would fall under the banner of the tax year in which you were UK resident. If you are a UK resident but working overseas then any bonuses paid in your foreign job would also be taxable. A way to avoid this would be if you were paid the bonus relating to the employment you are currently in, as a non-resident. Another way is if the bonus could be classed as a “termination payment” but this could have to be proven with necessary documents.

Are non-residents still liable for British inheritance tax?

It depends - the deciding factor is where you are domiciled for inheritance tax purposes according to the Revenue (HMRC). However, HMRC’s definition of domicility can be open to interpretation, and getting further advice on this could be beneficial.

Will my assets go to the people I choose?

There is a legal obligation in some countries known as ‘forced heirship’. This means certain people (close family and dependants in certain countries) will have a legal claim to your estate, irrelevant whether they are included in your Will or not. For some it might be the correct choice to remove this option by setting up an offshore trust in order to allow named beneficiaries on all or part of your estate.

Why do I need to think about this now?

It’s never too early to start thinking about your estate and how to pass it on, but it’s often too late. In fact, the earlier you start the easier it will be to plan. Also consider that there may be significant tax penalties for starting too late.