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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13869
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According to the income tax act 2007, a person not resident

Resolved Question:

According to the income tax act 2007, a person not resident in the UK is not entitled to claim personal allowances. Is that true?
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi
Thanks for your question -
No this is incorrect the current statute allows a claim to personal UK allowances for UK citizens (among others)
There are two routes to entitlement:
UK domestic statute
the interaction of this statute with the UK’s tax treaties
Or tax residence or domicile
However legislation in the 2014 Finance act proposed looking at the case for change to the current entitlement of non-residents to the UK Personal Allowance to make it a level playing field with other countries (as our award of personal allowances is higher than other countries plus the economic attractiveness of living elsewhere and helping the economy with taxation with double taxation treaties in the country of residence rather than of income arising (with a better personal allowance)
But as yet this is merely being looked and, and as yet has not been implemented but do keep an eye on each budget - as this could change (but I personally think hard to manage and ensure a fully levek playing field!
This further link provides the full listing of who is eligible to claim personal allowances when residing elsewhere (other than the UK) at things currently stand.
http://www.hmrc.gov.uk/manuals/rdrmmanual/RDRM10340.htm
Let me know if I can be of any further assistance.
Thanks
Sam
Customer: replied 2 years ago.

Since I am a British national, then I assume that this is the condition that applies as the country in which we resided is not mentioned in the others (Is this correct?):



  • an individual who is an EEA national of


Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal inc. Madeira & The Azores, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
Yes - so remain at this point (and until any legislation does in fact change) entitled to UK personal allowances each tax year.
Thanks
Sam
Customer: replied 2 years ago.

Sorry Sam, but where does the Income Tax 2007 then fit it and this is what is referred to in the HMRC website. I really do not want make a mistake having seemingly already made one already.

Again, I also assume that my wife and I are entitled to separate personal allowances?

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
Perhaps you can provide me with the link as I know not of any such legislation if my following response below does not answer your question
But the proposed changes do build onto the last change which was made in the 2007 Finance Act (Ron residents Chapter 4 section 56) - so this could well be it. (just making reference along with the proposed changes.
I have added a link to that specific legislation http://www.legislation.gov.uk/ukpga/2007/3
(and pasted it here)
Chapter 4
General
56Residence etc of claimants
(1)This section applies in relation to an individual who claims—
(a)an allowance under Chapter 2 (personal allowance and blind person's allowance) for a tax year, or
(b)a tax reduction under Chapter 3 (tax reductions for married couples and civil partners) for a tax year.
(2)The individual meets the requirements of this section if the individual—
(a)is UK resident for the tax year, or
(b)meets the condition in subsection (3).
(3)An individual meets the condition in this subsection if, at any time in the tax year, the individual—
(a)is resident in the Isle of Man or the Channel Islands,
(b)has previously resided in the United Kingdom and is resident abroad for the sake of the health of—
(i)the individual, or
(ii)a member of the individual's family who is resident with the individual,
(c)is a person who is or has been employed in the service of the Crown,
(d)is employed in the service of any territory under Her Majesty's protection,
(e)is employed in the service of a missionary society, or
(f)is a person whose late spouse or late civil partner was employed in the service of the Crown.
Which is what I have already provided you with in my original link.
I worked for HMRC for 26 years and now run my own accountancy business and keep up to date with all changes and proposed changes to legislation as part of my personal development (which I am required to adhere to!)
Yes both you and your wife have a separate entitlement.
I hope this offers you the confidence that my knowledge and advise is up to date and accurate!
Thanks
Sam
Customer: replied 2 years ago.

Sam,

I do not at all question your knowledge. Not at all, just wanting to be 100% clear. It is my lack of knowledge that is the problem.

I refer to the self same section which I am perhaps reading incorrectly. I see section 2 as defining the individuals who can claim a personal allowance and I do not fall under any of the categories as listed unless Section 2 is in addition to Section 1 in in which case Section 1 applies and then links to your previous answer.

Expert:  Sam replied 2 years ago.
Hi
Thanks for your response
I know you are not questioning my expertise, I advised on this as I want to ensure you are fully confident in the fact I am giving you the correct answer and where my expertise derives from !
Section 1 is in addition to Section 2 (and section 3!) and you fall under the EEA National category (United Kingdom) within section 2 which states
OR
an individual who is an EEA national of
Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal inc. Madeira & The Azores, Romania, Slovakia, Slovenia, Spain, Sweden and United Kingdom
Thanks
Sam
Customer: replied 2 years ago.

Sam, I will stop panicking and thank you very much. Much appreciated.

Expert:  Sam replied 2 years ago.
Hi
You are very welcome
Its never a bad thing to check until you have satisfied yourself this is a correct position (and I fully appreciate that fact)
Let me know if you require anything else, but a rating (or clicking accept) would be much appreciated so I am credited for my time with Just Answer
Thanks
Sam
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