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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 14504
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Do you have experience of international taxation, tax

This answer was rated:

do you have experience of international taxation, tax residency etc ?
Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: ok, so for example, a close associate of mine has a business in the UK and also in Ireland. He has been asked to declare income from other sources or any other businesses he owns both in UK and abroad. If he declares the business he has abroad, will be he be liable to declare earnings from that other business abroad in his UK tax return, and if so, will he have to pay tax on it, even though he does not bring that income into the UK ?
Assistant: Is there anything else the Accountant should be aware of?
Customer: no, only that he has a business in two countries, and has to submit a personal tax return in the UK, so he just needs to understand the implications, when he declares the non UK business in his tax return

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

Hi

Thanks for your patience

No he only has an obligation to declare the worldwide income to the tax department for the country in which he resides, which is why the Australian tax office are asking for the UK and Irish position as well as their own, but he can also declare any UK or Irish tax suffered along with the income , as we (in the UK) have a double taxation agreement with Australia - which means tax suffered on the originating country can be offset against the Australian tax due

As far as the UK tax office is concerned - this only has to have the UK tax position declared and not Australia (and only Ireland if Northern Ireland as this remains part of the UK)

Let me know if I can assist further

Thanks

Sam

Let me know if I can assist further

Customer: replied 9 months ago.
Ok thanks for your answer so just to clarify then:He is already a director of a company in the UK which of course he has already declared in previous tax returns.So, going forwards:1. On his personal tax return will he have to or should he declare the companies he is a director of in Republic of Ireland2. What are the implications of doing so. Will he have to furnish information about what he has earned from those Irish companies, ie show to HMRC copies of the Irish tax returns and bank statements etc ?3. Are the earnings which he declares from the Irish companies taxable, even if he has not brought or transferred those earnings into the UK and on what rate of tax is this applied ? So lets assume he has earned 70k after tax from the Irish companies, How would this be taxed in the UK, if at all ? Does it make a difference that he did not bring or transfer any of that money to the UK ?Thank You

HI

Is he generating any income as a director from the Irish company? Either salary or dividend or is it just the company that is making a profit on which tax is paid

He only declares UK income on the UK tax return so if the other directorship is Southern Ireland then he only declares this to Australia as his worldwide income and also to Southern Ireland (Irish tax office) as this is where it arises

Thanks

Sam

Customer: replied 9 months ago.
There are staff who are paid salaries in the Irish company, but the director himself does not draw a salary or dividend
Would you mind answering each point one by one as it will be much clearer that way. I don't get the point about Australia. Can you help me to understand how Australia comes in to this please ?

Hi

I do apologise - I was sure that it read that the individual as living in Australia

In that case that changes my answer - and I nee to know where does this close associate live and work from

Thanks

Sam

Customer: replied 9 months ago.
He works lives and runs a business in the UK, and is tax resident in the UK but also runs a business in Rep of Ireland. He spends about a week every month in Ireland. He does not draw any money from the Irish business, nor does he get any wages or a salary from there. Let me know if you need any more info. Please respond to the 3 points raised previously in light of this information. Much appreciated

HI

Then he must declare is UK income and only declare his Irish income IF he draws a a salutary or dividends or benefits or paid out expenses which you state he does not

Your three questionsI will reply as direct answers to the points as you raised them

1. On his personal tax return will he have to or should he declare the companies he is a director of in Republic of Ireland

NO as there is no income or other payments arising so no need to declare the position itself

2. What are the implications of doing so. Will he have to furnish information about what he has earned from those Irish companies, ie show to HMRC copies of the Irish tax returns and bank statements etc ?

No implications - as there is no income. If you were to advsie its position in the white space of the tax return or HMRC are aware of the position and have queries at which point then, then they have the right to ask for bank statements and Irish company returns

3. Are the earnings which he declares from the Irish companies taxable, even if he has not brought or transferred those earnings into the UK and on what rate of tax is this applied ? So lets assume he has earned 70k after tax from the Irish companies, How would this be taxed in the UK, if at all ? Does it make a difference that he did not bring or transfer any of that money to the UK

Yes absolutely, as he is a UK citizen so liable to tax on worldwide income whether remitted to the UK or not, but this is confusing as you state he has no income salary, dividends or other payment from the Irish company ???? He would pay tax at his highest rate (when combined with other incomes)

So if the combined oncome was in excess of £45000 then 40% isf more than £100,000 then loss of personal allowances (£1 allowance for every £2 over the £100K limit) and 45% tax and loss of personal allowances for income in excess of £150,000.

Thanks

Sam

Customer: replied 9 months ago.
The part about the earnings was in case he decides to draw a salary of dividend in the future.
Many thanks, ***** ***** you have given are very useful

HI

Not a problem, I am glad you have all that you need, but 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, and once again apologies re Australia !

Thanks

Sam

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