Isle of Man: UK Expatriate Self-Assessment Guide

Last Updated: 9 October 2000

Arthur Lancaster, Director of Tax, Ernst & Young Isle of Man

If you live, work or have retired overseas, or are intending to do so, there are many considerations to take into account. Research has revealed that many expatriates fail to plan properly and have not capitalised on their special tax position. This simple Self-Assessment Guide has been designed to assist expatriates in understanding the relevant issues.

What To Do Before You Go:

Tick appropriate

box:

Tax

Yes

No

1. Have you completed an Inland Revenue P85 and requested a repayment of any UK tax due or a no tax (NT) PAYE code where appropriate?

For your convenience we can arrange for a P85 form to be sent to you.

 

 

2. Have you considered the dates you will be outside the UK to confirm whether you will be non-UK resident or not?

Remember it is normally necessary for your absences from the UK to cover a complete tax year to be regarded as non-UK resident. This is particularly important, as from March 1998 the 100% earnings deduction for foreign earnings of UK residents is no longer available. Accordingly, you may wish to consider accelerating your departure if applicable.

 

 

3. Have you considered the tax and social security position in the countries you will be going to and the effects of any double taxation and social security agreements?

If not you should consult your employer or seek professional advice.

 

 

4. Will you be employed by a non-UK company?

This could be advantageous for tax and social security reasons. If in doubt seek professional advice.

 

 

5. If you are going abroad for more than five years have you considered delaying the disposal of any capital assets until you have left the UK?

Beware - new rules mean that from March 1998 you must be non-resident for five years to avoid UK capital gains tax on assets acquired whilst you were a UK resident.

 

 

6. Have you checked that any capital gains tax reliefs, e.g. reinvestment relief or on assets gifted to you, will not be clawed back when you leave the UK?

If in doubt, seek professional advice.

 

 

7. Have you considered the UK tax status of your spouse and children?

There may be opportunities for tax planning for assets held by your spouse or children. In addition, the allocation of your married person's allowance should be considered.

 

 

Property in the UK

 

 

8. Have you submitted a claim under the Non-Resident Landlord's Scheme to the Inland Revenue to receive rental income gross?

You must submit this form otherwise 22% income tax will be deducted from payments to you. For your convenience we can arrange for a form to be sent to you.

 

 

9. Have you considered making an election in relation to your property that it should be treated as you or your spouse's main residence?

You may need to consider this if the property is jointly owned or if you have more than one property.

 

 

10. Have you considered your liability to Council Tax?

 

 

Will you be reoccupying your property when you return?

This may be necessary to ensure you are eligible for the maximum Principal Private Residence exemption from tax when you sell the property.

 

 

11. Have you ensured all property expenses are incurred whilst the property is still let?

If you do not, tax relief for the expenses may not be available.

 

 

Health

12. Do you have health cover?

Making sure you have adequate health cover before going overseas is essential as it will protect you against financial risk and, more importantly, ensure you and your family receive the necessary level of medical attention. This is particularly valuable in countries where hospitals require assurance regarding payment or where English is not spoken.

 

 

Contract of Employment

 

 

13. Before accepting a job overseas it is important to establish the details of your contract. Areas that should be evaluated are salary and the currency you wish to be paid in, accommodation, removal expenses, flights home, school fees, leave, insurance and pension. We would advise that you discuss these issues with your employer.

 

 

Pension

 

 

14. Is there an impact on your pension?

If unsure contact your employer or seek professional advice.

 

 

Education

 

 

15. Are your children going with you overseas?

If yes, we can provide you wish a list of English speaking schools in the country you are going to live in.

 

 

Estate Planning

16. Have you made a will?

When overseas you will want to ensure that your wishes are carried out especially if your savings and investments are held offshore or you acquire property overseas.

 

 

Offshore Investment Products and Services

 

 

17. Have you opened an offshore bank account?

This may well have UK tax advantages. We can provide independent financial advice on offshore bank accounts and other investment products if required.

 

 

What To Do Before You Come Back

 

 

18. Have you kept a detailed record of your visits to the UK to ensure you qualify for non-UK residence status?

The Inland Revenue may ask for proof to support any claim to non-UK residence. In addition, you may wish to consider delaying your return to the UK until after 5th April to ensure your departure has been for a complete tax year.

 

 

19. Have you reviewed your investments to ensure you are minimising your UK tax liabilities?

As a basic step you should ensure you are not suffering withholding tax on UK bank accounts. You may also be able to claim reduced rates of tax on UK dividends under a double tax treaty.

 

 

20. Have you considered disposing of investments, or closing bank accounts to ensure interest has been received whilst you are still non-UK resident? (Known as "bed and breakfasting").

Any such action needs to be carefully planned as the rules regarding "bed and breakfasting" shares have changed and in addition you may be subject to UK capital gains if you have been non-resident for less than five years. Remember to delay disposals of assets standing at a loss until you are UK resident again to obtain a UK tax loss.

 

 

21. Have you considered the tax implications of any share options or bonuses granted to you abroad?

Such benefits may be subject to tax in the UK if received after your return.

 

 

22. Have you submitted your UK tax return?

If you have taxable income in the UK and have not completed a tax return there are automatic penalties. We can prepare and submit your UK tax return for you. Please forward the information requested on the personal tax return aide memoire attached to this document.

 

 

23. Are you coming to the UK for the first time?

You should seek professional advice as there are a large number of tax planning opportunities available, in particular in relation to non-UK source income and investments.

 

 

UK Personal Tax Return Information

Aide Memoire

Married Couples

Please only provide information in respect of your own affairs, we will write separately to your spouse if we act on their behalf. Where assets are owned jointly with your spouse, please show your share of the income only, this will be a half share, unless a declaration to the contrary has been made.

Income

Earned income from employment: Certificate P60

Benefits-in-kind arising from employment: Form P11D

Self employed and freelance earnings: Invoices and vouchers

Pensions: Certificates P60 or annuity vouchers

Deposit account interest, e.g. from banks, building societies, National Savings Bank, stockbroker, including closed accounts with a note of the interest at date of closure.

Please indicate whether received net or gross.

Dividend and interest tax vouchers or stockbrokers annual tax report.

Any income from abroad. Please indicate whether any local taxes have been deducted.

Receipts from the estate of a deceased person or as a beneficiary or a trust.

Receipts from insurance bond and other annuity arrangements.

Property income, e.g. furnished or unfurnished lettings, including details of all expenses.

Commissions, gains on surrender of life assurance policies, alimony or maintenance.

Outgoings

Expenses attributable to earned income, including professional subscriptions.

Expenses attributable to self employed and freelance earnings.

Expenses relating to Lloyd's activities, including copies of any stop-loss insurance or estate protection policies, fees for bank guarantees, ALM expenses, interest payments.

Certificates of interest paid for all loans on which relief is claimed.

Forms MIRAS 5 or 38E-2.

Retirement annuity premiums, personal pension premiums and additional voluntary contributions.

Forms SEPC, PPC & VCC

Investments in Venture Capital Trusts and Enterprise Investment Schemes.

Tax Certificates

Gift aid donations, net payments under deeds of covenant and duration of covenant. Payments of maintenance or alimony.

Capital Gains

Stockbrokers' contract notes for purchase and sale of quoted stocks and shares. New offers and issues, e.g. privatisation, rights issues, new offers to the public. Purchases, sales and gifts of other assets, e.g. houses, land, unquoted stocks and shares, etc. or chattels with a value over £6,800.

Residence Status

Principal place of residence.

Days spent in UK during the tax year.

Important

If you are an employee or in receipt of an occupational pension please sent to us for immediate attention all PAYE notices of coding so that we may ensure that your tax payments throughout the year are calculated correctly.

FEES

Our fee for preparing and submitting your UK tax return for the information provided to us is £250. In more complex cases we will advise you if the fee will be in excess of this and agree an alternative fixed fee with you in advance.

If you would like any further information on the above, please contact

Arthur Lancaster, Director of Tax

Ernst & Young, Jubilee Buildings, Victoria Street, Douglas, Isle of Man, IM1 2SH

Telephone: 01625 699000 Fax: 01624 699001 e-mail: alancaster@ey.co.im.

Website: www.ey.co.im

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.