Scots living abroad should check their tax place of residence urgently.

The tax authorities are currently working out who they think will be a Scottish tax payer ahead of the introduction of the new Scottish Rate of Income Tax on 6 April 2016.

H M Revenue and Customs are currently writing to all tax payers that they believe are Scottish residents to confirm the ‘accuracy of their records’.

Recipients will not need to do anything unless the details are wrong.

The Scottish Rate of Income Tax will be paid by UK tax payers who live in Scotland regardless of where they work.

But Scots who are living abroad or moved and have not told the tax authorities of their change of address may become a Scottish Tax payer without even knowing as the letters will be sent to the last known address.

At the time of introduction the Scottish rate will only apply to earned income including pay and pensions.

It will not apply to income arising from savings or dividends that will continue to be taxed at the UK rate.

The change will see the UK income tax rate being reduced by 10p across all tax bands in Scotland, with the Scottish Government then setting its own rate which could be more or less than now.

The Scottish Rate of Income Tax rate is charged across all bands.

Plans published suggest that there will be no change to the tax thresholds, the sums above which tax is paid at different percentages, until the system has bedded in around 2018.

The Scottish Rate of Income Tax will be announced by Holyrood on 16th December 2015 along with their budget proposals for the next financial year.

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