The effects of the Middle East conflict are devastating and the safety of you and your family should be your first concern.
Once out of harm’s way, you will need to understand the financial impact of your return and how your tax position may have been affected.
How is UK tax residence determined?
Your UK tax position largely depends on whether you are considered a UK tax resident.
HMRC clarifies that an individual will become a tax resident if they spend 183 days or more in the UK in the tax year (6 April to 5 April the following year).
You will also be classed as a tax resident if your only home was in the UK for 91 days or more in a row and you visited or stayed in it for at least 30 days of the tax year.
A Statutory Residence Test (SRT) will assess this and look into how many days you spend in the UK and where you work.
Many people working abroad rely on specific conditions, such as working full-time overseas or limiting the number of days spent in the UK, to remain non-UK residents.
Coming back to the UK earlier than planned affects your residency status and you may be taxed on your worldwide income and gains if you are found to be a UK tax resident again.
Exceptional circumstances
There is some leniency within the SRT rules for situations like these that are outside your control.
HMRC allows up to 60 days in the UK to be disregarded if they are spent here due to exceptional circumstances.
This could be due to war, civil unrest or situations where you are unable to leave a country safely and the current conflict in the Middle East may fall within this category.
The rules are strict and your application needs to show that your UK presence was out of your control and that you intend to leave as soon as it is safe to do so.
Those who rely on certain provisions need to keep a record of their travel disruptions, any official advice and employer instructions to back their case.
It’s also worth noting that the 60-day allowance does not apply to every part of the SRT and this can catch some people out.
Reacquiring UK tax residence
Situations like these are out of your hands and your time in the UK may go over the relevant thresholds and make you a UK tax resident again.
If you go over the 183-day threshold and become a UK tax resident, your worldwide income and gains from overseas are brought into the UK tax net, even if they were previously out of it.
There is also the possibility for those who have been living abroad for less than five years to have temporary non-residence rules apply.
This could result in certain income or gains made while you were a non-resident becoming taxable when you return.
If you return to the UK partway through the tax year, you may be eligible to split your tax liability between non-resident and resident parts.
You might even be able to reduce your UK tax liability if you have been a non-resident for at least ten tax years.
You might benefit from the Foreign Income and Gains (FIG) regime and this can exempt most foreign income and gains from the UK during your first four years back, as long as a claim is made.
Additionally, if you are considered a tax resident in the UK and another country, you will be a dual tax resident. A double tax treaty will then apply and determine which country has the right to tax.
How can we support you during this conflict?
We know you probably already have enough on your plate to manage being away from your home or work and there is the added uncertainty of the conflict.
Our professional team are here to offer you some guidance on your tax residency position and assess whether any exceptional circumstances or split year treatment can apply.
We can help you manage your tax liabilities and make sure you are remaining compliant with all jurisdictions.
If you need further advice on how your tax position is affected when returning to the UK, get in touch.