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UK Personal Taxation, Tax Liability, Tax allowances and reliefs, Tax Rates, Capital gains Tax, Paying Tax Abroad, UK Income Tax

TAX LIABILITY
If you become a resident in the UK you will normally have to pay UK tax on all your worldwide income. You will qualify as a resident if you:
1. spend 183 days or more in the UK in any tax year (the tax year runs from 6 April to 5 April),
2. intend to stay here at least two years, or
3. visit the UK for an average of more than 90 days per tax year over a period of four years.
Residence applies from the beginning of the fifth year. If you are a resident but not domiciled (broadly defined as permanently resident) in the UK you will only have to pay tax on your
overseas income if you bring it into the UK. The exception is income arising in the Irish Republic, which is taxable regardless of whether you bring it into the UK. If you are not a resident in the UK you will only have to pay UK tax on UK income.

TAX ALLOWANCES AND RELIEFS
All UK residents are entitled to the “basic personal allowance”. This is an amount of income on which you do not have to pay any tax. For the 2007-2008 tax year it is £5,225.
You may also be able to claim other allowances and reliefs, depending on your circumstances.
TAX RATES
For income above the level of the personal allowance, the tax rates for the 2007-2008 tax year are as follows:
1. 10 per cent on the first £2,230
2. 22 per cent on income between £2,231 and £34,600
3. 40 per cent on income over £34,600
The tax rates on dividends are:
1. 10 per cent on income up to £34,600
2. 32.5 per cent on income above that amount

CAPITAL GAINS TAX
Individuals are exempt from capital gains tax (CGT) on the first £9,200 of profit made in any one year from the sale of an asset. CGT is charged at the following rates:
1. 10 per cent on gains up to £2,230
2. 20 per cent on gains between £2,231 and £34,600
3. 40 per cent on gains over £34,600

PAYING TAX ABROAD
Some individuals living in the UK may have to pay tax abroad on their income. However, the UK has the most extensive network of double taxation treaties in the world. These will normally save you from being taxed twice on the same income. For more information on taxation visit HM Revenue & Customs website at:
www.hmrc.gov.uk