Advice regarding return to the UK - Tax residency, Split Year treatment and the DTA

[Lupo81]

Hi all. I will be seeking professional advice, but am hoping to maybe get some tips from your knowledgable selves!

I left the UK in October 2014 and have been in Australia since that time. I returned to the UK due to COVID several months ago and would like to stay longer to help look after my mum and granny. If I stay more than an additional 2 months though, I will be considered a UK tax resident under the SRT.

From Australia’s perspective, I believe that I am still an Australian resident (I am currently receiving Jobkeeper from my Australian employer and have a pending citizenship application but no longer have a ‘home’ in Australia).

If I do stay long enough in the UK to become a resident what are the implications tax wise? I understand that the Double Tax Treaty applies a tiebreaker in the case of dual UK and AU residency. In that instance the UK would ‘win’ as that will be the only place where I have a permanent home.

I do however have $20k of capital losses in Australia from the previous tax year that I would like to use by selling some shares before becoming a UK resident again. This is attractive since I have been a non-resident in the UK for 5 complete tax years so I will be exempt from UK CGT on those sales.

I would therefore like to claim split year treatment as I will soon be having my only home in the UK (case 4). This would allow me to sell these shares soon, whilst being considered a UK non-resident (and utilise the AUD loss) before becoming a UK resident.

Could this be possible? I cannot find any information of how the residency tiebreaker within the DTA will liaise with split year treatment.

Many thanks

[MARYROSE02]

I was trying to recall what happened to me, tax-wise when I went back to the UK for 12 years. 

I retained my permanent home in Australia and I lived with my Dad in the UK so I was "Domiciled" in the UK.

Once you are over the six month period or is 182 days in a financial year you become RESIDENT for that financial year, then in subsequent years if you stay in that country you become ORDINARY RESIDENT?

I had to submit a self assessment return to HMRC for the first few years then they decided to accept my Domicile status in OZ and I did not have to do self assessment returns any more, until I came back to OZ, and now I do so again, because I have property and income in the UK. But I don't get taxed twice under that agreement you mention.

That's as much as I know.