Understanding international tax law


The income you receive from a pension that you begin to draw on after you have moved abroad could mean you have to pay tax. Your pension under international tax law will still be taxable in the UK under the usual pension laws, but you may also have to pay additional tax under the ‘double tax agreement’ that covers pensions and the international tax law that governs this.

Note that you must inform HM Revenue & Customs when you leave the country. You local tax office can give you form P85 that you must complete in full before you leave the UK. This is so your status officially changes to non-resident. You may also, under international tax law, have to complete a tax return before you leave. Your tax office can give you more advice.

The double tax agreement comes into effect if you have an income (such as a UK state pension) but your normal place of residence is outside of the UK. To avoid this situation the UK has agreements with over 100 countries called the Double Taxation Agreement, or Double Taxation Convention. Under international tax law you may be able to claim a full or part-exemption from any double taxation you may be liable to pay.

International tax law becomes more complex if you will be working part of the time in the UK. For non-residents you would normally pay UK tax on the money you earn whilst in the UK. However, there are certain jobs that are treated as special cases under international tax law. These jobs include: 

  • Seafarers
  • Oil and gas workers
  • Crown employees
  • Students
  • Entertainers and sports people

If your part-employment falls into any of these categories you should get advice from your local UK tax office. If you also earn an income as interest on UK bank or building society accounts, international tax law could come into play. And any rent income you get from a UK property will also have tax due on these payments.

It is vitally important to have your tax and income affairs in order if you do not normally live in the UK, but you are still a UK citizen. If you are in any doubt about your legal status, the advice from a qualified solicitor will be invaluable. International tax law is very complex. You should not base your actions on any assumptions about your income or tax liability without taking comprehensive legal advice about your particular circumstances.

If you would like to obtain legal advice about international tax law, Caven can put you in touch with a local specialist tax law solicitor free of charge. So, if you have any questions or would like our help in finding local tax law solicitors please call us on 08001 221 2299 or complete the web-form above.

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