Income Tax Rules for UK Investor Visa Holders

In United Kingdom, there are two government levels that handle taxation payments. If you are looking for information regarding income tax rules for investors that hold VISAs in the UK, you will usually deal with the central government level. The central government also handles value added tax, fuel duty, and contributions in National Insurance.

Things to Know

If you have an investor VISA, you’re probably wondering if the income tax laws in the UK apply to you. You must be aware that the source of income is the main subject when it comes to taxation in the United Kingdom. This is regardless of a person’s place of residence or citizenship, or where a company is registered.

Whether you are a resident or holding an investor VISA, your income tax liability is limited to amount of tax deducted from your income source in the UK. This is also applicable to the income source because of a profession or trade in UK, or rental income in UK real estate.

It is important that you know some of the terms used in income taxation in the United Kingdom. For instance, you will usually encounter the term ‘domicile’. This means that a person is born in the UK or a person who is a permanent resident. Therefore, a person holding a investor VISA may or may not have the intention to permanently establish a home in the UK.

If you’ve obtained a visa for UK, and you stayed there for more than 183 days within the tax year, you are already considered as resident. Because of this, you may be subject to income tax. You can also be considered a resident of UK when you visit the country for 91 days in four successive years. As a VISA holder, you may be able to stay in the UK for a certain period and if you are able to comply with the above provisions, you are sure to enjoy reduced income taxes.

For resident investors holding a VISA but are not UK domiciled, the gains and foreign income are taxed based on remittance. Only the gains and income that are remitted in the UK are subject to tax. This is the general rule, and this may be reason why many investors see the UK as a tax haven.

In April 6, 2008, non-domiciled investors need to pay £30,000 in terms of annual tax to enjoy remittance-based taxation. Many investors with VISA in the UK are able to avail of reduced taxes because they are not domiciled.

For non-residents with tax sources in the UK, tax are deducted as follows – 20% dividends paid with REITs, 20% interest, and 20% royalties.

What to Do?

Tax compliance is very important in the United Kingdom. As an investor in the UK with VISA, you should know your obligations to the government. You have to make the necessary tax payments in order to enjoy continuous business activities in the United Kingdom. As mentioned earlier, UK is considered a tax haven for many investors, so be sure to observe tax compliance.

Author: UKVISAS.COM is an immigration firm who specialize in UK immigration and application, British naturalization with experience and expertise to help immigrants.