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If you would immigrate in October when the tax year starts in April in the UK, would that mean you would pay less taxes? E.g. a yearly gross salary of £60k would be only £30k income in that tax year, with a personal allowance of £10k.

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    Gross yearly salary isn't used to calculate tax for 6 months. What is the gross amount paid for the whole period in consideration, is used to tax. Personal allowance is for the whole year, so what is the gross paid, personal allowance is deducted from it. Yes you will pay less tax because you earned less. There is no profit per se, it is all in your mind. – DumbCoder Sep 22 '14 at 15:07
  • It depends on the specific of the tax law, and I'm not familiar with the British one on that level. However, in the US, for example, you'd be likely to pay more taxes if you are part-year resident than you would (on the same money) as a whole year resident. – littleadv Sep 22 '14 at 16:07
  • @littleadv: are you sure? I got paid some allowances grossed-up (i.e. they paid enough that I got a net figure after withholding) as an intern in the US in 2000 or so, and I ended up with a tax refund at year end. It's a bit hazy now but I'm fairly sure it was because I got a full year's allowance but withholding had been done allocating the allowance on a monthly basis. – GS - Apologise to Monica Sep 22 '14 at 18:57
  • @GaneshSittampalam I'm not sure I understand the language you're speaking, but to your question - yes, I'm sure. Results may vary but in the US it is extremely easy to pay more taxes as part year than as full year resident on the same income. – littleadv Sep 23 '14 at 2:48
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Yes, in the circumstances you describe, you would end up paying less tax per month in the first year than in future years. The allowance is allocated annually.

However there is also National Insurance which is calculated weekly or monthly, so you wouldn't get any advantage for that.

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As a special case, if you are resident in the UK for less than 183 days in a tax year, you might be considered non-resident for tax purposes. That means you can pay zero UK tax. However residence also involves other criteria. You should check up on this, and plan your affairs accordingly. investing in a consulation with a tax accountant might well be worthwhile.

If you do pay tax, then you pay tax only on what you have earned. So you will be taxed the same as someone who earned 30K spread over the whole year, which would be typically slightly less than half the tax paid by someone who had earned 60K over the whole year. However there can be circumstances under which you are also taxed on earnings from before you came to the UK. The country you left might also tax you on your UK earnings after you left (If that country is the US there is no 'might', they will tax you on your worldwide earnings). With most countries 'double taxation' agreements mean you won't pay tax twice on any of your earnings.

For all of these reasons consulting an expert in international taxation as soon as possible is well worth it.

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The immigration issue is a red herring: stating the situation in the simplest terms, someone who earns 30k in a tax year will pay less tax than someone who earns 60k in a tax year.

  • ... will pay a lower percentage of their income as tax. So if you earn 30k you pay less than half the tax that someone earning 60k pays. – gnasher729 Sep 25 '14 at 22:30

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