UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Hi Its MamaTax Here!
Thanks for the question.
Yes if you are considered UK Resident in the UK at some point in the current tax year then your contributions to SIPP are taken into account.
Thanks for getting back to me. Would my overseas employment earnings qualify as UK relevant earnings, thus allowing me to claim tax relief against SIPP contributions?
However its also worth to consider if you can make use of new statutory residence test came into force on 6 April 2013 which are detailed HERE: http://www.out-law.com/en/topics/tax/tax-for-entrepreneurs/statutory-residence-test/
Yes they will.
What were doing overseas/ full time work?
Yes, a full time employment contract with a company in Singapore. Because I was always UK resident before moving to Singapore, I'm pretty sure that I'd have to be outside the UK for a full tax year in order to become non UK tax resident in the relevant period. Hence my question re: the SIPP, as a way to reduce my tax liability if I return.
The new rules don require you to be outside UK for a full tax year. However it appears you are to be resident but its worth looking at the link i provided.
If you are UK tax resident, then then your worldwide income is taken into account in calculating UK taxes, and your pension contribution to a relevent fund/sipp is taken into account,.
And the Relevant Earnings or Relevant UK Earnings wont be that relevent as everything is taxed in UK.
OK, thanks. So in your opinion, earnings don't have to be UK earnings in order to be relevant?
Yes. Once you are UK resident, your worldwide income is taxed in UK subject to any double tax credits that you can get.