Hello everybody,
I'm a long time lurker but I've come into a situation where I need some advice. Maybe someone here has been in a similar situation. It's a bit of an odd one but I have a few options.
I'm British and currently a PAYE employee in the UK. My wife is Japanese and is currently living in Tokyo where we have a rented flat, and I have received my spouse visa earlier in the year. I am in the throes of relocating to Japan. I have a house in the UK which I shall put on the market soon. I wish to transfer the funds once sold to Japan, especially since the yen is so weak right now. I lived in Japan for around a year and a half from December 2019, so I believe my tax status would be 'non-permanent resident.'
How I understand my status is that I can earn foreign income and either continue to pay tax in the UK and then remit my income as is, due to double taxation agreements between the UK and Japan. Question is, would the money from my home sale be subject to tax as 'foreign sourced income' if I remit to Japan, even though no tax is due under UK law, as I am selling my principle residence? I think there may be some timings where I can remit in certain tax years and avoid the CGT, but I'm not sure. I also have some employment options available to me.
The other options I have available are:
2) Sell the house, become freelance and put all the money (income and house sale money) into an offshore account and pay tax on remittances to Japan. Note that I plan to stay long term in Japan moving forward.
3) Quit my job once the house is sold, and do something else in Japan (Japan only sourced income). But am I liable for tax on the house sale funds remitted to Japan?
4) Become a freelancer in Japan for my current employer, with Japan only sourced income (the company has an office in Japan so this is an option). Likewise, will there tax on remittances of my cash assets? If I leave my UK tax status before Jan 1st 2025, and change my tax status to Japan what are the implications?
5) Become an employee of my company in Japan.
My preference is for option 4 as I still have to travel to Europe a lot, and my company won't cover it. As a freelancer I can treat this as a business expense, hence the best option in my view. Or possibly to set up my own business and do something different.
Does anyone have any experience of this specific situation, and can you advise? I've found some examples of this kind of situation below but not one exactly matching.
https://yasuda-accounting.com/en/blog/taxation-on-remittances-to-non-permanent-residents-in-japan/
Thanks for reading the long post!
by kutsu30cm