Foreign income

Hi HMRC admin, My wife is a UK tax resident in 2021-22. She had no income in UK but she made a foreign income of about £1000. She had no other income. Does the personal income tax allowance cover foreign income? If yes, as her above-mentioned foreign income is within the personal income tax allowance, am I correct that she does not have to pay UK tax for this foreign income and it is not necessary to file a self-assessment tax return for it? Thank you. Kind regards, DL

Hi
 

Don L ,   A self assessment tax return is still required to declare any foreign income. The only exception is if it is divendends below £300. As the income mentioned is £1000 then this should be shown on the return. Personal allowances will cover the income so no UK tax will be due . Thank you.

Hello, Thank you for your prompt reply. For foreign dividends, I thought it is not necessary to declare if the total dividends, including UK dividends, are less than the e £2,000 dividend allowance? See link: https://www.gov.uk/tax-foreign-income/paying-tax However, you mentioned 'The only exception is if it is dividends below £300'. Can you please point me to the relevant guidance on this? Thank you. Kind regards, DL

Hello HMRC admin, I would be really grateful for a reply to my latest enquiry above. Thank you. Kind regards, DL

Hi,

Yes you are correct, if the income is only dividends then no return is required if under £2000. If the source of the foreign income relates to anything else, a tax return is still required.

Thank you.

Hello HMRC Admins. I too am confused about seemingly conflicting info on different parts of the HMRC website. - On the Register for Self Assessment page (https://www.gov.uk/government/publications/self-assessment-register-for-self-assessment-and-get-a-tax-return-sa1), it does state clearly that any foreign income over £300 requires that a self assessment be completed. This agrees with the admins' replies. - Under "Tax if you’re non-domiciled" (https://www.gov.uk/tax-foreign-income/non-domiciled-residents), it says,"You must report foreign income or gains of £2,000 or more, or any money that you bring to the UK, in a Self Assessment tax return," and "You do not pay UK tax on your foreign income or gains if ... less than £2,000 in the tax year (and) you do not bring them into the UK... If this applies to you, you do not need to do anything." This indicates that *any* foreign income below £2000 does not require Self Assessment, if it's the only source of income. - The "Check if you need to send a Self Assessment tax return" form (https://www.gov.uk/check-if-you-need-tax-return) asks "Do you need to pay tax on ... Income from outside the UK?" Because my foreign income is from investments/savings and

Am I right in thinking that the apparent contradictions are due to some sources assuming the person is being taxed on UK employment income? That is, if I were earning a UK income, I would only need to submit a Self Assessment return if my foreign investment income were >£2000. However, if foreign investments are my only income source, the £300 threshold applies and I need to file a return, even though I'll have no UK tax liability? Thanks.

Hi,

Please note that the 'foreign income below £2000' stipulation applies to individuals who are non-domiciled residents of the UK. If you are non-domiciled, you do not pay UK tax on your foreign income or gains if both the following apply:

(a) the total amount is less than £2,000 in the tax year
(b) you do not remit the income to the UK (for example, by transferring the income to a UK bank account)

See links below:

Tax on foreign income

Residence, domicile and the remittance basis

Thank you.

 

Dear Admins, Thank-you for the prompt reply, but unfortunately, it does not answer my question, which is: Do I need to file a self-assessment return? I am non-UK-domiciled, and my only income was foreign investment/interest income below £2000, none of which has been remitted to the UK. Does the requirement to file a return if foreign investment income exceeds £300 only apply to UK-domiciled taxpayers? Thanks again, 

Hi,
 

If you are UK resident, even if not UK domiciled and you remit the foreign investmentment income to the UK, then you need to complete a self assessment tax return. Thank you.

Hi again, I'm afraid that still doesn't help. Could you please confirm that, if I DO NOT remit the income to the UK, am non-domiciled, and earn less than £2000 from foreign interest/dividends, I do not need to complete a self assessment? Thanks, Cameron

Hi Cam W
That is correct.
Thankyou.
Regards.

I live in the UK. If I have a foreign account - that I forgot about. Ie the money has been left in the account, and has not been accessed. However it has accumulated interest in the mean time. Do I need to declare it to HMRC retrospectively - with how much interest was gained every year? Or only if the income was above £2000? Do I declare in the year I access the account? I already fill in a self assessment tax form yearly. Thanks

Hi,

You will need to declare it retrospectively for the amounts received each tax year.

Thank you.

Hi HMRC Admin, I have foreign interest income of over GBP2,000 but foreign dividend income of less than GBP2,000. For foreign interest income, I shall put the amount under "Interest and other income from overseas savings" of SA106 Page F2 and 3. For dividend income, I shall put the amount in Box 6 "Foreign dividend (up to GBP2,000) and Box 7 "Tax taken off foreign dividends" under "Interest and dividends from UK banks and building societies" of SA100. Kindly please confirm whether my understanding is correct. Thanks, 

Admin name removed . 

Hi Ki Chan,
As you are already having to complete the SA106, you should show your foreign dividends on the SA106 also.
Thank you. 

Hi HMRC Admin, I arrived at the UK on 11 January 2021 and resided in Airbnb apartments till 18 March 2021, could you clarify for me whether I need to complete the tax return for the tax year 6 April 2021 to 5 April 2022 and pay tax in the UK for the said tax year with reasons/explanations and relevant rules/articles? Thank you.

Hi RAYMONDNG,

If you qualify for split year then you only report any foreign income for the UK part of the year RDRM12000 - Residence: The SRT: Split year treatment.
If you do not qualify then you will need to report all your foreign income to the UK Tax on foreign income.  
The guidance at RDRM12150 at www.gov.uk will help you work out if split year treatment applies. 

Thank you.

 

Hello, I am a dual British/French national. For this year I am a tax resident in France. While I am here in France I have set up a PEA savings account (it is equivalent to a stocks and shares ISA). In the next tax year I will move back to the UK. When I become a UK tax resident again will I be taxed on any gains that I make within the French PEA? (I do not recieve divedens).

Hi,

UK residents are required to declare their worldwide income to HMRC, including any gains arising from a French PEA account.

Thank you.