We use cookies on this site to ensure the most desirable user experience. By continuing to browse this website you are giving implied consent. Find out more.

Tax planning for married couple relocating to UK

Contents | Show more +

When my husband got an interesting job offer from the UK, we immediately decided to relocate. I run an online business and can work from anywhere in the world. However, I understood that it was not so easy since I received payments from different countries and feared that I might get into trouble with tax authorities. That’s why, I decided to contact Imperial & Legal’s specialists who helped me do everything right.

Madina, 28 years old
Entrepreneur from Kazakhstan
Clients’ names and photos have been changed

Madina and Yuri are a married couple from Kazakhstan. They relocated to the United Kingdom a year ago when Yuri was invited to join a project to develop educational computer games. He agreed right away. First, the job fully matched his specialisation in game design. Secondly, his wife had an online English school, and Yuri was actively helping promote it. He wanted to get familiar with modern educational methodology.

Madina was not so eager to relocate to the UK though she had been here several times. Of course, it was appealing for her to dive deep into the culture of the language she taught. At the same time, she understood that life in the UK was expensive and did not want to lose the level of comfort that she was used to. In the end, however, she gave in since she did not want her husband to miss such a great career opportunity. They got UK Skilled Worker visas with Yuri as the main applicant and Madina as a dependant. Soon after that, they relocated to the UK.

Yuri and Madina knew that the UK taxation system was strict and worried that they could get into trouble for not complying with the requirements. Yuri was on the payroll so it was easy to calculate his taxes. Madina’s income was not fixed; she was getting money from different countries with different regularity and from different accounts. This presented an issue.

At first, the couple did not plan to declare the income that originated outside the UK. But then they realised that the UK authorities might want to investigate how they supported themselves. The expenses would be higher than Yuri’s salary.

Madina’s dependant status was also confusing since the couple were not sure that Madina could work without applying for a separate visa. To find answers to all these questions, the couple decided to contact Imperial & Legal for help.

Our clients

Yuri, 32 years old, from Kazakhstan. Relocated to the UK on a UK Skilled Worker visa. Works as a game designer.

Madina, 28 years old, from Kazakhstan. Relocated to the UK as her husband`s dependant. Runs an online English language school that is registered in Astana and is attended by the CIS citizens.

The challenge

To provide clients with detailed answers to all their questions, develop a long-term tax strategy, and file tax returns.

The solution

Imperial & Legal’s specialists assured Madina that she could work in the UK even though she was a dependant. They also commended her responsible and reasonable approach to taxation matters. Obviously, hiding income is a criminal offence that can lead to deportation. Reliable financial strategy is a must for a business, and our advisors set off to help Madina with it.

Since both our clients were not domiciled in the UK, they could pay taxes on the income that originated outside the UK into the Kazakhstan budget. In other words, use a remittance basis.

For Yuri, there was no point in claiming a remittance basis since he was on payroll in the UK and had his income taxed through his employer. Madina’s case was a bit more complicated.

All her income originated abroad, and she transferred a part of it to her British bank account to spend in the UK. More than half of her income remained, however, in Kazakhstan. It was convenient for Madina because she could use that money to pay her counteragents in Kazakhstan who helped her with video editing, managing social networks, and advertising.

Besides, she often visited Kazakhstan herself and spent one or two months there. For that, she needed money. She also bought some household items and clothes in Kazakhstan since they were cheaper than in the UK.

First of all, though it was not part of a tax consultation, our experts warned Madina that she should not leave the UK for a long period of time if she planned to apply for British citizenship in the future. An applicant for a British passport must not stay outside the UK for more than 450 days in five years prior to the application.

As for taxes, Madina could benefit from a remittance basis since she would have to pay most taxes in Kazakhstan where the tax rates are lower than in the UK. In the UK, she would have to pay tax only on the income she remitted and spent in the country.

Madina’s priorities in the future could change since she plans to spend more time in the UK and visit Kazakhstan less often. In that case, she would need more money in the UK, and gradually start transferring all her income to her British bank account and stop claiming remittance basis.

At the same time, the profit generated by her school was increasing significantly. The school’s reputation was boosted by Madina’s relocation to the UK. In the UK, she could make vlogs about English culture, invite native speakers to her classes, and share nuances and tricks with her students that one could notice only living in the country. Therefore, Madina could still have some extra income that would be invested outside the UK.

The couple agreed to contact us again in a year to choose the most profitable taxation regime. In the meantime, our accountants prepared personal tax returns for Yuri and Madina that were successfully processed by the relevant authorities.

Yuri and Madina sorted out their taxation in one month

24 June
Contact is made with Imperial & Legal
+3 days
The current situation is assessed and analysed
+3 days
A service contract is signed
+2 weeks
All the required documents are prepared, and tax returns are drafted
+1 week
The final draft of the tax return is completed
24 July
Tax optimisation scheme is developed

The conclusion

Despite the strictness of the UK taxation system, it is still flexible towards foreign nationals. This is especially beneficial for foreign entrepreneurs and investors who run businesses outside the UK and are domiciled in a country that offers lower tax rates.

Imperial & Legal’s specialists will help you choose the optimal taxation regime to legally lower your tax burden.

Tired of getting general advice?

We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.