New Model Adviser - For professional financial planners

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.
6723.42 -6 0.09% 04:35

Gov’t proposes relaxed tax requirements for non-resident employees

Gov’t proposes relaxed tax requirements for non-resident employees

The government has made a series of changes relaxing the tax reporting regime for non-ordinary UK residents due to be implemented as part of the Finance Bill 2013.

The government has proposed draft legislation which would simplify tax rules for employees who are residents but not ordinarily resident in the UK, work in both the UK and overseas under a single employment contract, and are taxed on a remittance basis.

The government is proposing to change elements of Statement of Practice 1/09 (SP1/09) rules so those affected will no longer be taxed on a transactional basis, but individuals can calculate their tax liability for the tax year as a whole.

The proposals would also lessen the restrictions on the type of overseas bank accounts allowed.

Where previously individuals had to set up specific qualifying accounts, they will no longer have to, instead they will be allowed to use existing accounts.

Currently an individual needs one account for each employment, however the government’s draft legislation will allow mixed employment income from more than one employment to be held in one single account time to avoid complexity from transfers being made between several accounts.

It is also proposing joint accounts held with a spouse or civil partner can be a nominated account in circumstances where the additional account holder does not make any economic contribution to the account or nominate it as their qualifying account.

The types of income and gains the government will allow into a qualifying account are mixed employment income, a capital gain when foreign currency is converted into sterling, proceeds from the disposal of certain employment related securities or employment related securities options or bank interest from the account.

Under new special mixed fund rules, the government will allow individuals to keep a qualified account if they ‘taint’ it with non-permitted types of income as long as they remove it within 30 days of becoming aware of the payment.

The government said newly proposed special mixed fund rules will only apply if an individual can claim overseas workday relief, have general earnings from one or more employments and nominate an account for use as a mixed fund that only certain types of income and gains are paid into.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.