Falkland Islands Tax Residency

We are well into the new year now, and pretty soon for many of us (me included) we will begin to receive our Falkland Islands tax returns in our post boxes. Although some of us may not.

This can be a simple oversight, regardless of whether you get one sent to you or not, if you are tax resident in the Falkland Islands, you are required to fill one out. But what if you are not tax resident? What does that even mean?

Firstly, it’s not the same as being resident or “a resident” of the Falkland Islands. Being a "tax resident" has its own rules. 

Around the world, the rules regarding tax residency are long and complicated. In the Falkland Islands they are a little simpler; you are tax resident here if you have been here for 183 days in the calendar year. I should clarify that the Falkland Islands tax residency rules are also not that simple, but for most of us, the 183 days rule is it. So if you arrived in July or later, or left in June or earlier, you would be non-resident. 

So it’s time to start counting days on a calendar (if you are close). Maybe your airbridge got delayed or you got stuck in the UK due to COVID, but none of these things matter because it is purely done on the days you were in the Falkland Islands. If you were here for more than 183 days you are tax resident. If you weren’t, you are not. 

There are advantages and disadvantages to being either. A lot will depend on your personal circumstances. I couldn’t tell you without a thorough understanding of your worldwide income. But in summary here are the key differences.

If you are resident, you get the full personal allowance of £15k and are taxable in the Falkland Islands on your worldwide income. 

If you are not resident, you are taxable in the Falkland Islands on your Falkland Islands income only and your personal allowance is pro-rata on your days in the FI.

Also, if you’re non-resident, you aren’t required to fill out a tax return in most circumstances.

That’s right! You can put off with dealing with your taxes for a whole year (until you become tax resident at any rate).

But should you fill out a return?

It’s not quite the million-dollar question, but refunds can be substantial. Someone who was on the cusp of being resident and earning about £39k could be talking about a refund of over £1,500. 

They can also not be worth the time and effort to fill it out, and you can also owe additional tax. 

Let’s consider the last remark; you can also owe additional tax. If you request a tax return, fill it out, and find you owe money, you have to pay. If you request a tax return and don’t fill it out, you’ll be fined £100 and then have to fill it out.

So maybe you should let sleeping dogs lie? Or should you?

How do I know if I should fill out a return?

It depends on a number of factors - how long you’ve been in the Falkland Islands, how much you have earned and (most importantly) how much tax you’ve had taken off your income in the Falkland Islands. That, in itself, is not simple and the wrong rates are sometimes applied – it’s a fairly manual system all round.

Can Albatross Tax help?

Of course we can! Albatross Tax are here to help with our Non-Resident Tax Return service. 

We charge a low rate of £35 and you provide us with the necessary information. We will calculate your tax, advise on the return and complete the return if we think it’s appropriate.

As the tax deadline is still some way away (returns have yet to even be sent out), we also have a special early bird offer for the launch of this service.

£35 EARLY BIRD GUARANTEE!

If you are non-resident and you pay online and provide your information required by 31 March 2023 and we don’t calculate you’ll get a tax refund of at least £35 (based on the information you provide), we will refund your fee.

If your refund is less than £35, we will still complete your return for you!

Visit our Online Sales page for more details!