We have looked at some of the theoretical things to consider from a tax perspective, when going abroad, such as your residency position, double taxation and dealing with HMRC.
We can now go on to see how the technical rules apply in practice in the examples Max, Tom, Melanie and Victoria. Hopefully this will help things fall into place.
Please note that in many typical outward student scenarios we wouldn’t expect things to get as complicated as in some of the examples here. As explained in our double taxation section, even if you remain taxable in the UK on your overseas income, the generous tax-free personal allowance will often cover it all and there will be no overseas liability to inform HMRC about (you may however, still need to send in a form P85).
Nevertheless, we would encourage you to look through all of the examples even if they don’t seem immediately relevant to you, as you will pick up useful information to stand you in good stead for dealing with your tax affairs in the future.
Studying and working abroad for a year (foreign taxes paid) – Max
Studying and working abroad for a year (no foreign taxes paid) – Tom
Working abroad casually – Melanie
Studying and working abroad on a longer term basis – Victoria
Note that these examples are indicative of the UK position only. You may need to take professional advice for your specific circumstances, including in the overseas country.
With regards to the foreign tax figures that have been used in these examples, they have been used for the purposes of the illustrations only and should not be taken as reflective of the true liabilities in those countries in those circumstances.
It is important to note that we are only looking at the tax issues here and there may be other non-tax matters to consider, such as immigration, which you may have to seek some advice on.