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You are here: Home Finance & Business Tax Expert tax tips: Returning to the UK
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05/03/2012Expert tax tips: Returning to the UK

Expert tax tips: Returning to the UK Returning to the UK after a period overseas needs careful planning both from a personal and financial point of view. The Fry Group explains why.

Plan early
Look to start planning in the UK tax year before the move (if possible). There are often significant tax savings you can make, but which rely on steps being taken before the end of the preceding tax year.

Getting back into the UK tax system
Whether you are moving back for a temporary period, or returning permanently, becoming a UK resident must be planned for in order to limit your tax exposure and protect your wealth.

If you are returning to the UK permanently, the date on which you set foot onto British shores, having diminished your links overseas, is when the taxman assumes you are back in the UK tax system. It is often possible to secure a favourable position in the year of return, as you receive a less than a normal year's income but a full year's allowances, reliefs and lower tax rate bands.

On your return, you must establish contact with HM Revenue and Customs in order to advise them of your change of residence status, claim any allowances and arrange entry into the Self Assessment system, if appropriate.

Deciding what to do with a pension

If your pension fund is based outside the UK then, from the date of your return, 90% will be chargeable to UK tax (whether it is remitted or not). If the pension arises from a UK fund, tax will be charged on the whole amount - even though the service to which it relates may have been wholly overseas.

Cash deposits
For cash held in overseas deposits, careful planning is needed to ensure that any interest paid after your UK return, but accrued whilst you were overseas, is not liable to UK tax.

The rules surrounding capital gains tax and property are more complicated than people often appreciate. While you may only have one property in the UK, this does not automatically mean it is your 'main residence' for tax purposes. It is a matter of reviewing when the property was purchased, your periods of occupation and time living in any other property, including foreign property. This is an area that always warrants careful review.


Real tax advantages can follow if you are domiciled outside of the UK, either by origin or choice. Specialist advice should be taken regarding your position here.

Returning to the UK provides an excellent opportunity to take control of your investment portfolio. The first step is to review how your investment objectives can best be met once you are home. Be aware that capital gains tax will apply to your investments from the moment you return, so it makes sense to plan ahead and even make changes to your portfolio in light of your return.

Once you are back on UK shores, a reputable adviser can work with you to put together a plan that will identify your income and tax position according to your situation.

If you have retired, you might need to generate a secure income from your savings that will keep pace with inflation. If you are to continue working, you might want to accumulate capital.

There is never one right answer to suit all, and so it makes sense to use your return as an opportunity to determine what you need from your finances in order to ensure that you have a comfortable and secure future.

Dean Power, Assistant Tax Manager, The Fry Group / Expatica

The Fry Group has offices in the UK and overseas. We can help you properly plan you return to the UK, and fully support you once you are back in Britain. For more information please visit Also, you can register for news updates via


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