Interaction of taxes in the UK and overseas
There are situations in which individuals can have tax to pay in the UK and an overseas jurisdiction. This could be because you are treated as a resident for tax purposes in both countries, or because you are resident in one jurisdiction but with income arising in another.
In such a scenario the first question is whether there is a double taxation agreement (“DTA”) in place between the UK and the other country.
If so, the DTA will provide a so-called “tie-breaker” clause which will determine which of the two countries you will be considered resident in. The UK has an extensive network of DTAs with other countries.
The DTA will also set out which country has taxing rights in relation to certain types of income. This is important to prevent any double taxation. This can mean in most cases that you effectively suffer tax at the higher rate of the two countries.
The ETC Tax team have extensive experience in advising on the application of DTA’s.