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Posted Fri, 09 Feb 2024 14:30:56 GMT by
I'm a full time UK resident. My elderly mother is a full time resident of Canada but has retained bank accounts in Hong Kong where she used to work. We've been advised to open a joint bank account in Hong Kong so if she's incapacitated and unable to operate the account herself, I can do so on her behalf and apply the funds to her upkeep. My mother will fund the new account: all capital and income will be entirely hers i.e. I'll have no beneficial interest in her lifetime, only a right of survivorship. The only scenario in which I'm likely to move money from the joint account to the UK is to reimburse out of pocket expense I incur on my mother's behalf. 1. I understand that without a declaration of trust, HMRC will treat me as receiving 50% of any interest earned on the joint account (whether such interest actually comes into my hands or not) and this must be declared by me as overseas income on SA106. A) I'm retired and HMRC has confirmed I don't need to submit a self assessment form SA100. So how should I submit the SA106? Will I need to submit an SA100 anyway? B) Can I use my annual personal allowance to reduce tax payable on the foreign income? C) Are any other deductions or exemptions available? 2. If we wish to make a declaration of trust,: A) Does it need to be a formal deed of trust, signed by both parties and witnessed or will a signed and witnessed letter suffice for HMRC? Is there an approved form? B) How and when should the declaration be submitted to HMRC? C) If the declaration makes provision for the reimbursement of legitimate expenses, will that satisfy HMRC tht such payments aren't income in my hands? Would I need to produce proof e.g. invoices and receipts? Thank you.
Posted Wed, 14 Feb 2024 09:10:59 GMT by HMRC Admin 21
Hi SassNorth11,
A tax return (SA100) is required, where you need to submit any additional tax return pages, such as SA106 (Foreign).  We cannot advise you whether you need to or how to make a deed of trust that would apply in Hong Kong. If you have to complete a self assessment tax return, you will be declaring your world wide income on the tax return, using the supplementary pages, such as SA106 (Foreign).  You may be asked to provide supporting evidence, where an equiry into your tax return takes place.
Thank you.
Posted Wed, 14 Feb 2024 09:24:19 GMT by
Many thanks for your reply, Admin 21. Kindly please clarify: A) Can the annual personal allowance be used to offset foreign income declared on an SA106? B) Is there any time limit for submitting a declaration of trust to HMRC i.e. should this be lodged for approval as soon as it is made and before a self assessment tax return is due? Thanks again.
Posted Mon, 19 Feb 2024 12:58:55 GMT by HMRC Admin 19
  1. If you are entitled to claim personal allowances then this would be set against your PAYE income first. Any balance could then be used to be set against your foreign income.   
  2. There is no time limit, however, it cannot be applied retrospectively, so the date the alternative split applies is the date the form is signed and you then have 60 days to submit the signed form and declaration of trust.
Thank you.

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