Repatriation to the UK during the coronavirus lockdown.

See all Posts
May 26, 2020

As discussed in recent blogs, over the last few months we’ve seen the world be gripped by the current pandemic. Markets have crashed and the cost on a humanitarian level is immeasurable. There is understandably a lot of fear and confusion, so we aim to offer as much advice on wealth management, retirement and financial planning as we possibly can amid the break out of COVID-19, and these truly unprecedented times.  

Many of our clients are now considering moving back to the UK as soon as the lockdown restrictions ease, to be with family and friends. Some are stranded in the UK without wanting to be and could face huge tax bills on their global income. If you have found yourself stuck in Europe because of the recent virus lockdown read on or contact us here and we can help ease the confusion and panic you may be facing at this difficult time.

In this blog post, we aim to help those who have decided to start the journey home to the UK because of the virus and what this means for your assets, whether they are in order and what tax implications could lie ahead. What benefits and opportunities there could be due to the virus and its restrictions on human life?  

How does Covid-19 affect British expats in the UK?

We have spoken to some of the UK’s best accountancy firms and they believe that British expats and non-residents stuck in the UK due to the virus lockdown could be hit with heavy tax bills due to breaching the maximum number of days allowed for a short-term stay unless they have their affairs completely in order.
Due to the lockdown, HMRC has explained that expats and non-doms who are stranded in the UK beyond the agreed allowance will be able to claim “exceptional circumstances” due to the virus lockdown and they will not have to pay UK tax on the global income they earn.
If this relates to you and you want to know more contact us here>
Should you sell your assets before returning to the UK?
Before you repatriate, start thinking about all your affairs, assets, property, wages and transfers. If you have assets to sell, then from a capital gains tax perspective it makes sense to do this before hitting the UK or structuring it in the correct environment. If you can think about dates of travel, do this too. Landing in the UK on or after the 6th of April is a brilliant way to simplify your tax implications.
Property or investments you might want to keep? If you wish to keep hold of certain properties then we can help with additional opportunities to mitigate potential tax from assets.

Repatriating to England

Do you own a QROPS? If so, you are expected to inform the QROPS provider when you have come home to the UK. Once you transfer or benefit from your QROPS, the scheme is legally obliged to report payments to HMRC, regardless of how long you have been a non-UK resident previously. If you have taken an income from a pension while you were away from the UK, you will be liable for UK tax on that income once you land in England. We have many ways in which we can help you just ask!

Capital gains tax (CGT)

CGT is a tax on any gains made on the majority of assets. This includes the sale of the asset or gifting. HMRC calculates this on the tax year in which the gain is made. The tax rate is related to this and your income.
When added to the income of that tax year any section which falls under the higher tax rate is subject to 20% and anything falling below that will be 10%.

Potentially Exempt Transfers (PETs)

A PET is a gift that is exempt from UK tax. The gift will only become taxable if the donor fails to survive for seven years from the date it was given.

The limit to such a gift is £325,000 there are a few hidden hurdles within structuring your finances like this, so call us here and we can walk you through potential pitfalls.

These are just some of the financial implications to repatriating back to your home country. The planning for family and physical assets we will have to leave to you. We hope to have covered enough information for you to start planning your return to the UK. If we have missed anything or you are confused as to where you fall in certain tax brackets contact us here and we can walk you through everything you need to know about repatriation to the UK.