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Sam
Sam, Accountant
Category: Tax
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I am an Irish national, domiciled in the UK (for all

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I am an Irish national, domiciled in the UK (for all purposes) for the past 30+ years. I am currently in the process of filling my self-assessment tax return for 2016/17. My income is mainly comprised of employment (PAYE), with some limited self-employment in a second occupation (hence the return). My mother died in 2016, and at that time her house was rented out to tenants. After her death, the tenants remained in place for a time, and continued paying rent. As a beneficiary of my mother's Will, I was theoretically in receipt of a one-third share (approx. 2400 euro) of that rental income, although in reality, the receipts were needed to cover out-of-pocket expenses such as my mother's gravestone, property taxes and buildings insurance, while the estate remained frozen pending Probate. No moneys were remitted to me, but I nonetheless registered for tax in the Republic of Ireland and paid tax (approx 460 euro) on my share, up to the point where the tenants left the property in 2017. I am now trying, in the UK, to declare both the income and the Irish tax already paid on it to HMRC. Entering the income and tax paid as though the funds were remittable causes the system to declare me liable for re-taxation on it in the UK (approx. £800 sterling). The system doesn't appear to find me eligible for Foreign Tax Credit Relief, in that scenario. Entering the income and tax as 'unremittable' obviously prevents that outcome, but this income, while it remains unremitted, doesn't appear to fit the HMRC criteria for 'unremittable'. I am aware that I may need to carry out a subsidiary process with HMRC on this matter, perhaps on paper and over physical post, alongside my online submission, but with the self-assessment deadline now only a week away, can I afford to do this without being judged to have missed the deadline for self-assessment?

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

I am afraid you would need to fill also the foreign income page which HMRCs version does not allow, so this should have been a paper return filled in and sent to HMRC no later than 31/10/2017

You can NOT treat this as unremittable

And its more than £2000 a year so also must be declared

So I am afraid you will need to complete a paper return so you can declare the income and claim the foreign tax suffered and you have to declare this as although you may look upon yourself as non domiciled, the fact you have lived here for 7 out of the last 6 years means you either declare the income or pay an annual remittance basic charge which for this year 2016/2017 is £30,000 which is far greater than the UK tax due (less suffered)

So you will need the main self assessment return SA100 2017

A self employed income page SA103

AN employment page SA102

A foreign income page SA106

Residence and remittance page SA109

An I am afraid incur a £100 penalty as the return will be late OR

Find an account to file for you OR purchase third party software that includes the above pages

There is no way to avoid this under these circumstances - even though HMRC are not fully compliant with online aspects of self assessment they do make this clear as to what the free online service can and cant be used for

let me know if I can assist further, or if you have all that you need, it would be appreciated if you could rate me for the level of service I have provided or click accept

Finally please also note that when the property is sold you must declare your share of the gain

Thanks

Sam

Customer: replied 4 months ago.
Hi, first of all, I don't see myself as non-domiciled in the UK, in case that's what you mean. I renuinely am not domiciled in Ireland, which (forgive me, I didn't state this clearly) is where this activity took place.Also, I don't understand what is meant by "the fact you have lived here for 7 out of the last 6 years".If the amount were less than £2000 sterling, might I have other options? The reason why I'm asking is that the rental continued until July 2017, but I was planning to declare the whole amount up to then in this Return, so as not to have to go through this again next year. However, if I only count the months to April, my total share is in fact 1400 euro (note: less than sterling).Thanks for the pointer on the house sale, but as it looks now as though the sale price will be less than the valuation at the time of my mother's death, the sale is taking place _prior to_ liquidation of the estate. My share will form part of a non-UK inheritance, and I was previously advised by a colleague of yours on this service that I would not have a UK tax liability on that inheritance as a result.Finally, might you be in a position to direct me to a listing of third-party software for tax return submission which does contain the Foreign pages? It would of course be for myself to investigate it further at that point, prior to any purchase.thanks
Customer: replied 4 months ago.
excuse the typo above - "I renuinely am not domiciled in Ireland" should read "I genuinely am not domiciled in Ireland"

HI

But you are wanting to not declare the income and the only way this could ever happen is if you are non domiciled so I was making this clear to you

Then even if you were this is more than £2000 and you would then be charged £30,000 as you have lived here for more than 9 years -

You have no options based on what you now advsie - other than you must declare the income and tax paid even of now below £2000 for the period of time declaring as you are domiciled in the UK and therfore treated as every otehr UK taxpayer.

I have no experience with third party software but as long as they allow the file of the pages I advised you of then you will be fine (as they are ALL HMRC endorsed) so I am not in a position to recommend any,as I file all my clients foreign income returns by paper to keep the costs down for them

Thanks

Sam

Customer: replied 4 months ago.
Thanks for the update, I realise we're into overtime here, and I'm not intending to ask any more questions.Just one assertion I need to contest, however - "you are wanting to not declare the income".This most emphatically isn't the case. My default assumption is that I must declare anything I received. I was just wondering if the rules around submission changed if the amount were less than £2k sterling in one year. I'm assuming they're not, so no need to ascribe negative intentions here.Thanks for your help, and I'll be purchasing software to avoid getting adverse attention for late submission (the £100 penalty would only be the beginning, I fear)

You stated that Entering the income and tax as 'unremittable' obviously prevents that outcome, but this income, while it remains unremitted, doesn't appear to fit the HMRC criteria for 'unremittable'.

And I endorsed that fully as to why this was not unremittable and that you did not qualify for the domicile elsewhere and are just a normal UK taxpayer, which relies on you declaring worldwide income and any foreign tax suffered so I do apologise if we got to be approaching this as cross purposes, but I just needed to ensure you were aware fully of your obligations and why

Do let me know if I Can assist further, or, if you have all that you need, it would be appreciated if you could rate me for the level of service I have provided, click accept

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 4 months ago.
Thanks, ***** ***** very much appreciate the fact that you diverted me from violating regulations by declaring the income as 'unremittable', which was indeed a danger here - will provide positive feedback