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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I was working in Sweden years, using a UK based tax advisor

Customer Question

I was working in Sweden for 6 years, using a UK based tax advisor (with an office in Sweden). However the Skatteverket have decided their plan wasn't that cunning and want £70k-ish from me. I am told the HMRC will be tasked with collecting. Are they going to accept a charge against my house, or will they want paying sooner rather than later?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Sweden is in the European Union. EU countries co-operate where one country's tax authority is chasing a taxpayer who lives in the other country and they do use one another's tax authorities to take the case to court if necessary.

I would be surprised if the Swedish tax people agree to a long term payment plan and will probably want paying as quickly as possible. Certainly, as far as HMRC is concerned, they will pursue taxpayers all the way to bankruptcy. I had one client who came close to being bankrupted by HMRC a few years ago. They have been known to put a lien on property especially if the taxpayer has school age children but anything is possible.

There are some brief notes on the cooperation which takes place between EU member states here. If there is no hope of fighting the judgement the your advisers should try to negotiate a payment plan if you are unable to settle the tax liability immediately.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

my current situation is that I am on the edge of a divorce, (which actually might be a relief) but not started proceedings yet. If kids spends at least half of the time with me, that might stop them taking it all straight away.

As a part of the settlement, we have a main house and a buy-to-let, so there should be enough equity (350k-ish) in the BTL to pay this tax bill, and have enough left over for a fair chunk of a new house for me. As the debt was incurred when we were a couple, it should be divided between us, so taken into consideration in the settlement, but the HMRC will be asking me,not her. That's more background than a question.

Another question is that I have 70k-ish in a pension, if I took it out, I would have to pay 40% tax, so could only pay £42k. If I wanted to HMRC to take that to pay the bill, could they take it without the tax being deducted, to cover the whole amount?

Expert:  TonyTax replied 1 year ago.
HMRC cannot access your pension unless you cash it in and if you cash it in, that will trigger the tax charge. That cannot and will not be waived. Whilst the pension is in your pension fund, it's pretty much beyond a creditor's reach.

If I were you, given that you appear to have the cash to pay the tax, I'd pay it and move on after having another adviser look at the possibility of escaping the Swedish tax liability which will probably be a waste of time and money but at least then you'll know you had a second opinion.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15763
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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