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My brother has returned a personal loan to me. This was a loan I had extended to him before moving to the UK. I received approximately £10,000 from my brother and deposited it into my overseas credit card account to avoid mixing it with my UK savings and income.
Do I need to declare this amount as income?
Cheers, HMRC! It's all as clear as a bell now, sorted out all my worries about getting the declaration right.
I am reaching out to seek guidance on a tax-related matter, related to the recent relocation of my spouse and me to the UK. We are new residents, having lived here for over 183 days in the previous year.
Before moving to the UK, my spouse operated a Sole Proprietorship in Hong Kong. The business made a profit of approximately £50,000 last year. Of this profit, approximately £30,000 was transferred to my personal account in Hong Kong as I worked as a contractor for my spouse's business.
Since the Hong Kong tax system does not allow a deduction for a spouse's expenses, we didn't factor my contributions into our business tax return there. Additionally, as I understand that my spouse can use my tax allowance here in the UK, I didn't include my earnings from the business on my Hong Kong tax form; we simply submitted the profit tax.
Given this situation, we would appreciate your guidance on how to declare our income. The options we are considering are as follows:
A) Should we declare my wife's income as £20,000 and my income as £30,000? This allocation would be substantiated by my service quotation and invoice.
B) Should we declare my wife's income as £50,000 and my income as £0?
Furthermore, if we choose option B, would I need to declare the transfer of £30,000 to my personal account? If so, how should I go about doing so?
We look forward to your advice on the most appropriate course of action to comply with UK tax regulations.
Thank you for your time and assistance.
Thank you, HMRC
In my situation, my wife employs me, and I have control over the company. However, in Hong Kong, we cannot deduct spouse's earnings from the company as a business expense because it automatically utilizes my tax allowance.
In my wife's case, should she declare her (total earnings minus my income from this company) for UK tax purposes? Then, I declare my income separately?
*Please note that the money is transferred to my personal account.
I am writing to seek guidance regarding the appropriate treatment for income recognition for work completed and invoices issued before my move to the United Kingdom in June 2022.
Before relocating to the UK, I had the opportunity to undertake various projects and successfully completed them. Furthermore, I issued invoices to my clients for the work performed during that period. However, the payments for these invoices were not received until September 2022, after my relocation.
Given these circumstances, I am uncertain whether I should recognize the income based on the date of invoicing (which occurred before June 2022) or the date of receipt. It is crucial for me to accurately report my income and adhere to the relevant regulations in this situation.
I kindly request your assistance in clarifying the appropriate approach for recognizing the income earned from work completed and invoices issued before my move to the UK. If there are any specific regulations or guidelines that I should follow in this matter, I would greatly appreciate it if you could provide me with the necessary information.
Q1: As we moved to the UK on 18th June 2022, we have been earning overseas income from a sole proprietorship in Hong Kong which is in my wife's name. Part of this income was received prior to our move to the UK. In this case, should I consider the profit (income - expense) earned before this period and then deduct it from the total?
Q2: If the total profit of the company is reflected in my wife's company tax bill, but Hong Kong laws prevent me from deducting my share of the income as a company expense, what else should I be doing apart from invoicing and showing the cash flow in my account?