If you are living abroad or are making plans to live abroad and you are a citizen of the United Kingdom, you may be entitled to certain tax credits. Not many people may be fully aware of the credits they can get, but it would be in your best interest if you could get all the information you need regarding this; it’s almost as important as knowing how much you can get with your state pension. The thing is, your tax credits in the UK can be affected depending on your circumstances abroad – for instance, if you have a child and are living in a member state of the EU, if you don’t work abroad but reside with your partner abroad, and so on. So what should you know about tax credits if you are living or working outside the United Kingdom? Let’s find out.
- Crown servants overseas
If you are a servant of the crown who is posted for work overseas, you may get tax credits. HMRC (Her Majesty’s Revenue and Customs) can treat you as ordinarily resident in the United Kingdom just before you went abroad, or if you have been posted overseas several times and with no breaks. Ordinarily resident means that you normally reside in the UK. For HMRC to decide this, they will have to consider factors such as where your home is, where your close relatives live, why you were in the UK, and if you are planning to leave the United Kingdom permanently or for good in the next two to three years. You may also be eligible for particular tax credits if HMRC knows that you were in the United Kingdom prior to being sent abroad and the reason for your being in the country was due to your posting.
- Individuals with partners overseas who are crown servants
If you are living overseas with your partner who is posted overseas as a crown servant, you may also get tax credits. The same is true if you are living in the UK, but your partner is working as a crown servant abroad.
- You have state pension or UK benefits, and you have a child
If you don’t qualify for tax credits based on the above-mentioned criteria, you may still get child tax credit; you can do this if you and your offspring reside in an EU member state and if you receive state pension or other benefits such as incapacity benefits, widow’s benefits, bereavement benefits, employment and support allowance based on contributions, industrial injuries disabled benefits, or severe disablement allowance.
As most everyone knows, dealing with taxes and tax credits can be quite tricky if you are not aware of what the regulations are. The same is true when dealing with a pension, especially if you are living abroad. If you want extra security in your old age, you can definitely take advantage of pensions for expats as well – this can help you with your plans upon retirement and provide you with the extra cushioning you need if you want to enjoy your golden years whether in another country or within the UK.