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Posted Thu, 29 Dec 2022 23:32:42 GMT by MS
Hi, Me and my family moved to UK in tax year 21-22 due to employer change and had UK employment income and some interest income from Indian bank accounts (NRE/NRO savings and fixed deposits) and previous foreign employment income (carried work/employment completely before moving to UK and eligible for split year treatment). I realized recently that for tax year 21-22 as my Indian bank Interests including Fixed deposits was more than GBP1000, I need to declare and pay any additional applicable taxes with a self-assessment. I know I am already delayed and registered for UTR few days back and waiting for the letter with the UTR number. I have the below three questions please answer separately for 1-3. 1. As per my knowledge so far on UK tax system/timeline, I have already crossed the timeline for paper self-assessment submission but still (after receiving my UTR) I can use third party software to include SA106/SA109 (foreign income and split year treatment) online with my SA100 and still be on time (without late submission penalty) if I can submit online my self-assessment return and pay all applicable taxes by 31st Jan 2023. Is this understanding, correct? 2. My Indian NRE bank account Fixed deposits are of type reinvestment of cumulative principal and interest after every maturity term (e.g 2,5 or 10 years). I understand this is taxable in UK whenever any interest is paid into my bank account or when cumulative (principal and interest) amount is reinvested for a new term or when any other interest is paid in my bank account e.g premature withdrawal of any fixed deposit before a full term completes. Is this understanding, correct? 3. Some of our other Indian bank accounts which I was late to convert as NRE/NRO account and were remained as resident Indian account in tax year 2021-22 as we did not travel to India for prolonged time due to Covid related risks and restrictions. I also received some interests in some FDs in those resident Indian bank accounts and paid all taxes and filed an income tax return declaring my Nonresident Indian status and received refund as my income in India was below taxable limits for nonresident Indians. Do I also need to include those earlier Indian resident type account interest in my UK tax return self-assessment? If yes, can I claim 15% tax credit for those also in UK as per tax sparring mechanism implemented in in UK-India DTC, I learned from some other discussion in this forum? Kind regards, MS
Posted Fri, 30 Dec 2022 11:04:21 GMT by MS
*to better clarify question 2, I also understand for any tax year tax is not payable for the running fixed deposits for which no interest is paid in my bank account or no fixed deposit is reinvested for a new term or no premature closure is done. Thanks for your answer. kind regards, MS
Posted Thu, 05 Jan 2023 16:27:49 GMT by
Hi MS,

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: Contents

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 will help you work out if split year treatment applies.

You can still file online with 3rd party software by 31/1/23. 




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