If you are resident in the UK and have earned income or gains in another country, you may be taxed in that country as well as in the UK. Double tax treaties are in place to ensure that income and gains are not taxed twice. However, in order to avoid a situation like this, it is important to seek tax advice on any sources of income or gains from overseas. When working overseas, countries will request a ‘certificate of residence’ as evidence that the individual or company is resident in the UK. It will also confirm that the income or gains from overseas will be taxed in the UK. A number of countries may also require additional forms to be completed and these will need to be prepared and presented to HM Revenue and Customs (HMRC) in a certain way.
What you should tell us/ your acountant?
- The name of the country which requires the certificate
- The source of income, for example business profits, dividend, interest or royalties
- Name of payer
- Confirmation that the individual or company is the beneficial owner of the income or gains, in which the certificate is required for.
Key points to remember
- It will take HMRC between 6 – 8 weeks to process and issue a certificate of residence.
- Any additional forms required by a country will not be certified by HMRC unless the forms have been printed on double sided paper.
- Any additional forms and certificates required by a country may also need to have an apostle stamp from the Foreign and Commonwealth Office.
- Usually three copies of the additional forms should be sent to HMRC (one for HMRC, one for the country requesting and a third for the individual or company).
- A certificate of residence cannot be requested for a period ending on a future date.
- A certificate of residence will only be valid for a particular source of income or gains.
It is important to note that each country works differently and so it is vital that you seek advice to save time.
If you require further information or advice, please contact our Partner Adam Moody.