How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TaxVince Your Own Question

TaxVince
TaxVince, Accountant
Category: UK Tax
Satisfied Customers: 961
Experience:  Chartered Accountant >20 years + Qualified IFA
68927923
Type Your UK Tax Question Here...
TaxVince is online now
A new question is answered every 9 seconds

Hello, I am a Portuguese citizen living in Portugal with no

Resolved Question:

Hello,
I am a Portuguese citizen living in Portugal with no ties to the UK.
I plan to be a student in the UK doing a full time university course with a duration of 18 months, starting in September 2013.
I don't plan to work in the UK or continue living there after the course.
In Portugal, I sold my primary residence in May 2013 and there are capital gains. According to Portuguese tax law, these gains will not be taxed if they are reinvested to buy another primary residence within 36 months - and this is what I intend to do.
In addition, I receive rental income from an apartment that I let out in Portugal. I will need to send this money to the UK for my maintenance during my studies. As this value is not very high it is possible that I would need to use additional funds provided by my parents, who live also in Portugal and have no ties with UK.
The Portuguese fiscal year goes from January 1 to December 31.
I need to know what the tax implications, if any, in the UK and in Portugal are, and what should I do in each country?
Thanks
Submitted: 1 year ago.
Category: UK Tax
Expert:  TaxVince replied 1 year ago.

MamaTax :

Hi

Its MamaTax Here!

MamaTax :

Overseas students coming from any of the countries with a double taxation agreement with the UK (that includes Italy) will not need to pay tax on any income and gains that arise outside the UK which they subsequently bring to the UK for their maintenance or education. Money is for your maintenance if it is used to fund your normal living expenses while in the UK. Money brought to the UK to pay for food, accommodation, and materials is all included, but bringing in money to invest is not.
In the past HMRC have said that if a student brings £15,000 or less to the UK in a tax year (6 April one year to 5 April the next) they will treat that money as being for the student’s maintenance. Money that is used to pay for a student’s course fees will also be added and counted as for a student’s maintenance.

Therefore if i were you i would not get worried about UK tax at all.

HMRC has prepared a guide that you will find helpful here: LINK

MamaTax :

Hope this helps. If not - please let me know. If satisfied please could you rate the question before you go.

Customer:

Hi,

Customer:

thank you for your reply. My main concern is the capital gain from the sale of my primary residence since I will not be bringing this amount to the UK. I wonder whether my situation would not fall within the case described as "You have income and gains overseas and you bring some of them to the UK, but leave the balance of the income or gains overseas" due to the existence of gains from the sale of my home in Portugal.


Would these gains not count to assess my tax situation while studying in the UK because I am a student or perhaps because they originated from selling my own home (and these are tax free)?


If, indeed the visiting student situation applies, would I need to do anything tax-wise in the UK (e.g. tax declaration, ...)?
Customer:

thank you for your reply. My main concern is the capital gain from the sale of my primary residence since I will not be bringing this amount to the UK. I wonder whether my situation would not fall within the case described as "You have income and gains overseas and you bring some of them to the UK, but leave the balance of the income or gains overseas" due to the existence of gains from the sale of my home in Portugal.


Would these gains not count to assess my tax situation while studying in the UK because I am a student or perhaps because they originated from selling my own home (and these are tax free)?


If, indeed the visiting student situation applies, would I need to do anything tax-wise in the UK (e.g. tax declaration, ...)?
Customer:

Hello,Thank you for your reply. My main concern is the capital gain from the sale of my primary residence since I will not be bringing this amount to the UK. I wonder whether my situation would not fall within the case described as "You have income and gains overseas and you bring some of them to the UK, but leave the balance of the income or gains overseas" due to the existence of gains from the sale of my home in Portugal.


Would these gains not count to assess my tax situation while studying in the UK because I am a student or perhaps because they originated from selling my own home (and these are tax free)?


If, indeed the visiting student situation applies, would I need to do anything tax-wise in the UK (e.g. tax declaration, ...)?
Customer:

Thank you for your reply. My main concern is the capital gain from the sale of my primary residence since I will not be bringing this amount to the UK. I wonder whether my situation would not fall within the case described in HMRC's guidance text for students in the LINK you sent me: "You have income and gains overseas and you bring some of them to the UK, but leave the balance of the income or gains overseas" due to the existence of gains from the sale of my home in Portugal.
Would these gains not count to assess my tax situation while studying in the UK because I am a student or perhaps because they originated from selling my own home (and these are tax free)?

If, indeed the visiting student situation applies, would I need to do anything tax-wise in the UK (e.g. tax declaration, ...)?
In summary: do I need to say/tell/deliver anything to HMRC?
And finally will I be considered Resident or non-Resident in the UK, taking into account the double taxation treaty between Portugal and the UK? This might be relevant to open a student bank account in the UK to pay for accomodation, e.g.
Thank you and Regards.

Customer:

Sorry, the test went out all garbled. This is what I meant:

Customer:

Thank you for your reply. My main concern is the capital gain from the sale of my primary residence since I will not be bringing this amount to the UK. I wonder whether my situation would not fall within the case described in HMRC's guidance text for students in the LINK you sent me: "You have income and gains overseas and you bring some of them to the UK, but leave the balance of the income or gains overseas" due to the existence of gains from the sale of my home in Portugal.
Would these gains not count to assess my tax situation while studying in the UK because I am a student or perhaps because they originated from selling my own home (and these are tax free)?

If, indeed the visiting student situation applies, would I need to do anything tax-wise in the UK (e.g. tax declaration, ...)?
In summary: do I need to say/tell/deliver anything to HMRC?
And finally will I be considered Resident or non-Resident in the UK, taking into account the double taxation treaty between Portugal and the UK? This might be relevant to open a student bank account in the UK to pay for accomodation, e.g.
Thank you and Regards.

MamaTax :

Your foreign income or gains from letting out a property, or from interest on a bank account etc are not a problem because of double taxation agreements entered into by the UK with Italy. That income is taxed in Italy. However if you are to work in UK, then you will need to register for tax in UK.

MamaTax :

The foreign income or gains also cover the capital gains from the sale of the property - no need to worry or do anything in UK.

TaxVince, Accountant
Category: UK Tax
Satisfied Customers: 961
Experience: Chartered Accountant >20 years + Qualified IFA
TaxVince and other UK Tax Specialists are ready to help you
Expert:  TaxVince replied 1 year ago.
Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.
Customer: replied 1 year ago.

Thank you for replies. I think the only standing issue is the resident/non-resident status and if that impacts your advice in any way.

Expert:  TaxVince replied 1 year ago.

Once you come to live in UK and spending generally 90 days a year in UK you become UK tax resident – by Automatic residence tests rules. (you can read more about statutory residence rules –HERE).. From 6 April 2013, the legislation allows a tax year to be split into two parts (previously, tax years have been split by concession under Extra Statutory Concession A11 otherwise one was treated as either UK resident or non-UK resident for a full tax year and at all times for that tax year). Split year treatment means that you can be treated as UK resident for only part of a tax year, if you come to the UK part-way through a tax year and taxed on the basis of being non-UK resident for the part of the tax years during which you are abroad.

However this only affects you if you are working in UK or earning other income excluded from the “students maintenance income/gains” you currently have. To be on the safe side you can ring HMRC on 0300 200 3300 and notify them you are a student and you don’t work in UK but have maintenance income for your studies. HMRC will decide whether to send you tax returns to complete –I don’t see them doing that as all your income is exempt from UK tax. Even if they do send you self-assessment returns – you will complete them but without any tax implications on you.

Regards

 

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
< Last | Next >
  • http://ww2.justanswer.com/uploads/baktax/2009-7-15_202414_Frame.jpg Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
  • http://ww2.justanswer.com/uploads/teap007/2009-01-10_145815_bill_justanswer_for_profile.jpg TEAP007's Avatar

    TEAP007

    Tax Preparer

    Satisfied Customers:

    754
    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • http://ww2.justanswer.com/uploads/BE/berduchwal/2011-6-7_84817_pict0854.64x64.jpg berduchwal's Avatar

    berduchwal

    Accountant

    Satisfied Customers:

    669
    Qualified accountant and bookkeeper running my own practice since 2008.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    61
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/RO/Ronaann/2012-3-19_23343_SSL22629.64x64.JPG Mrs-Tax's Avatar

    Mrs-Tax

    Tax Adviser

    Satisfied Customers:

    59
    Law Degree, 19 years in UK Tax.
  • http://ww2.justanswer.com/uploads/TG/TGraham12/2012-7-17_81212_bigstockBusinessHandshake508163.64x64.jpg Thomas's Avatar

    Thomas

    Solicitor

    Satisfied Customers:

    48
    Exposure to general tax issues
  • http://ww2.justanswer.com/uploads/struppiaml/2009-10-9_95150_anthony_business_002.jpg AnthonyL's Avatar

    AnthonyL

    Tax Adviser

    Satisfied Customers:

    19
    ATT, ATII, 12 years tax experience
 
 
 
Chat Now With An UK Tax Professional
TaxVince
TaxVince
UK Tax Professional
961 Satisfied Customers
Chartered Accountant >20 years + Qualified IFA