Practical points

1. If a person is in self assessment, then the residence and domicile pages of a self assessment tax return need to be completed to claim non-residence, non-ordinary residence, non-domicile status as well as dual residence or split year treatment. These cannot be done on HMRC’s free on-line system. So the options are to complete your tax return on paper with the earlier (31 October) deadline, or to use commercial software. 

2. The Finance Act 2009 exempts individuals who are employees in the UK and are also employed abroad from the need to file a self-assessment tax return or pay tax on overseas income. The conditions are that the only income abroad is employment income of less than £10,000 and bank interest of less than £100 in the tax year – both of which must be taxed abroad. But individuals who are self-employed in the UK, have other untaxed income in the UK for which a tax return is needed or who exceed the limits will need to file a self assessment tax return. This leads to some disparity in treatment as the self employed would then need to declare overseas income and potentially face UK tax on their foreign income. 

3. For tax credits, the measure of income has always been worldwide income calculated on an ‘arising’ basis, even if you are taxed on the remittance basis. Capital gains are ignored.