Suggestions Requested for ILR Due in 2017

[uktierone]

Hi All

I need an advice in regards to my ILR which is due in 2017.

Apologies in advance for writing a long post, just want to make my situation clear.

Background :

a. I am currently on Tier 1 (General) and arrived in the UK after 2.5 Years of my initial Visa grant in 2009.

b. My first entry in the UK was in August'2012 and got my first extension immediately after 4 months of my arrival in Dec'2012

c. For my first extension I claimed my Earnings (12 month salary) in combination of India Salary (8 months) + UK Permanent Job Salary (4 months)

d. For my 2nd Extension I claimed my Earnings totally based on UK Salary (as a Contractor)

Documents I have :

a. Considering my first extension which was done in combination of Indian Salary + UK Permanent Job Salary , I have my 8 months salary statements + Form 16 (India Tax Document) for 8 Months Salary + Letter from HR confirming my Salary + UK Salary Statements + P60 [These were the documents I used for my first extension]

b. Considering my 2nd Extension which was based on UK Salary (as a Contractor), I have my Salary Statements + Dividend Details + P60

c. I do have SA302 for 2013-14 ; 2014-15

d. I do have Employment History Document giving details of my Income and Tax for Years 2012-2013 (From August'2012 Till March'2013) + 2013-2014 + 2014-2015

e. Will get the SA302 and Employment History for 2015-16 and 2016-17 before I go for ILR next year.

Queries

a. Considering my scenario, specifically my first extension wherein it was based on combination of Indian Salary + UK Salary , do you advise me to arrange any specific documents so as to avoid any issues in ILR next year.

b. Also please note I don't have an SA302 for 2012-2013, as that time I was working as Permanent Employee and but I do have Employment History and P60 for that duration.

Will look forward for your comments and suggestions.

Regards

[uktierone]

Experts Opinions please

[iberia]

Yes. I have similar case. I had my overseas earnings for my initial grant of T1 and first extension as the earnings were generated overseas that no tax record for the above period at HMRC. For the rest of the five years during my stay in the UK, ie. second extension and ILR 5-y route, I have been staying in the UK and paying tax in UK so HMRC should have all my records for the five years period. By the time I apply for ILR, how to clarify the previous two or three years overseas earnings?

[iberia]

I am in similar case as well. My initial T1 visa and my first extension (3 years )were based on my overseas earnings. And my second extension as well as the rest of 5 years in the UK route are based on UK earnings with HMRC records. By the time I apply for ILR, they will look at my whole period, ie. initial grant of tier 1 and first extension 3 years + second extension 5 years period. In this case, will there be an issue for the overseas earnings given the taxes were paid overseas instead of in UK so no HMRC record for overseas tax.

[Abc499]

@uktierone

its really tough question, better to consult with expert accountant.

the rules is if you have any income out of UK which is over £300, you need to fill a tax return to HMRC if you are resident of UK. You need to pay tax on it or not that depends on some other issues, you may not have to pay tax and might get tax relief if its taxed on source.

with no question you have to declare to HMRC about the foreign income if the earning period you are resident of UK (even if there is no tax). On your case its confusing because the foreign earnings period was before you move to UK and when you are not resident yet but again tax year 5th April 2012-5th April 2013 you were resident and economically active in UK ( though part). So the question is ... is the rules apply for the earnings from the date you are resident or for the whole of the tax year you need to include!

(could not manage to get the reference but probably its good to submit full 5th April 2012-5th April 2013, and you might not taxed)

As you have time, will be good to consult with expert accountant. Hope it will not be issue at the end.

[iberia]

@uktierone

its really tough question, better to consult with expert accountant.

the rules is if you have any income out of UK which is over £300, you need to fill a tax return to HMRC if you are resident of UK. You need to pay tax on it or not that depends on some other issues, you may not have to pay tax and might get tax relief if its taxed on source.

with no question you have to declare to HMRC about the foreign income if the earning period you are resident of UK (even if there is no tax). On your case its confusing because the foreign earnings period was before you move to UK and when you are not resident yet but again tax year 5th April 2012-5th April 2013 you were resident and economically active in UK ( though part). So the question is ... is the rules apply for the earnings from the date you are resident or for the whole of the tax year you need to include!

(could not manage to get the reference but probably its good to submit full 5th April 2012-5th April 2013, and you might not taxed)

As you have time, will be good to consult with expert accountant. Hope it will not be issue at the end.

Thanks for your reply. It is the rule that UK resident need to declare overseas earnings over 300 pounds to HMRC. The point is how to clarify the UK resident status. Before coming to UK, we used our overseas earnings to apply for Tier 1 G visa. For this part of overseas earnings, I do not think it necessary to declare to HMRC as by the time the earnings were generated we were not UK resident.

The question is, after coming to the UK and going back overseas to work for more than 180 days when the resident status was lost by the 180 day rule of break, whether or not the earnings generated during this period is subject to HMRC. My arguement is that earnings when overseas stay is more than 180 days should not be subject to HMRC. As the 5-year period is based on this non-180 day break ie. UK residence period for consecutive 5 year without a break.

Happy for disucssion.

[uktierone]

Thanks members for responding.

I have done some research on this and have analysed following :

a. As per HMRC there are terms used UK Resident and UK Domicile for tax payments

b. As per HMRC there is a concept of Split Year which applies in my case i.e. arrival to UK in mid of tax year

c. As per HMRC a UK resident is taxed based on arising basis but if one has foreign income then it is taxed on remittance basis

d. As per HMRC there is an exemption for declaring foreign income as part of self assessment if :
1. You are resident in the UK.
2. You are not domiciled in the UK.
3. You are employed in the UK.
4. You are a basic rate taxpayer (based on your worldwide income and gains).
5. Your income from overseas employment for the tax year is less than £10,000.

There are more details on this in HMRC Guidance - HMRC6

Experts may please comment.

Regards

[uktierone]

Hi All

Does any one has gone through ILR application with a similar situation as described in my case.

Experts please comment.

Regards