Clive Smaldon

Not HMRC...You have incorrectly deducted mortgage interest, your assessable income from property is £11000 not £9500, with any relief for the morgtage interest given as a basic rate credit up to the amount of the assessable tax on property income in isolation. As you dont have a property income liability there is nothing to set the tax credit against, therefore, the HMRC figure is £300 (£1500 x 20%) higher than your figure. To confirm, it is not piossible to treat the mortgage interest as a deduction, it must be given as a tax credit when the tax on property profit in isolation is considered.

...thought Id give you figure/calculation...(£117449 above £100000 ) = 17449 / 2 (tapered at allowance restirction of £1 for £2 above limit) is £8724.50 lost @ 40% = £3489.50 tax due. Difference to your figure of £3493.50 is £3.70 which is a PAYE rounding figure.

Best way I can explain it is...I think "override" is the confusing bit here. The DTA makes the decision as to treaty residence where something is assessable when it is "only" assessable in one state, when the DTA says it may be taxed in both then treaty residence hasnt overridden anything, it doesnt turn someone in to a non resident for UK tax purposes under SRT...but will leave it for HMRC to clarify re that and penalties etc...

Not HMRC, tax acct. Its because your code is giving you full personal allowances, when, as you are over £100k your allowance is partially lost for the year, i.e. tapered above £100k until its lost altogether, on £117449 you keep some allowance, but not all of it.

NP...the main issue is, most people dont understand there are two types of tax residence, statutory residence and treaty residence and they are independant of each other when it comes to if/what/where. Yes, it is a very common misunderstanding, and HMRC have been very good over the last few years at looking at returns where FTC has been claimed in the UK on sources "only" assessable in the treaty resident country, because, if actually UK treaty resident FTC is not allowable.

Not HMRC, tax acct. https://www.gov.uk/tax-foreign-income/paying-tax , you need to meet all the criteria not to file a return...note, bank interest in not mentioned, so if you have foreign bank interest you need to do a return, even if no tax due

Re HMRC comment on remittance basis...you would need to check whether you would lose personal allowances in the UK (you mention working in the UK for 2 years) https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32050 https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm32040

I wanted to illustrate by reference to this situation...Frenchie determines he is SRT in both countries and decides he is Treaty resident in France. His treaty residence in France does not mean he is not still also SRT in the UK, he is still SRT in the UK if he meets SRT rules, indeed if he didnt Treaty residence would not even need to be considered. Per the DTA, Employment is "only" taxed in the state of Treaty residence. Income from property "may" be taxed in the state its in, its still liable also in UK under "worldwide income and gains" principle. There is an issue, he is SRT in both countries, so he needs to revert to Treaty residence clarification for any source that is "only" assessable in one state, the employment source, and unless the employment is carried out in the UK then as Treaty resident in France then thats where it is taxed and it does not go on the UK return or in the UK calculation. The income from property is not "only" taxable in one state, the DTA simply says France can tax it, so, if they do, (as the UK would in reverse situation) as he is SRT in both countries he claims tax credit under the DTA in the other country. n.b. this is often the case with employment income, pension income etc, unfortunately, many people think that because the PAYE equivalent is paid in the country that the situation is dealt with. I have numerous cases every year where the person has actually become treaty resident in the UK and the source should not be taxed in the paying country at all and is liable in the UK with no tax credit, which means they then need to obtain refunds from the paying country to then pay over to HMRC.

...i.e. you can be SRT in the UK and SRT and Treaty resident in France (i.e. not the UK) or SRT and Treaty resident in the UK whilst being SRT in another country or countries...on that basis the guidance per the Treaty is relevant as to where sources can be taxed...being treaty resident outside of the UK would mean that sources that are "only" taxable in one state are not taxable in the country where there is no treaty residence, if a person is still SRT there and the source "may" be taxed outside of the other country of SRT then it is still liable in the other country of SRT, with a tax credit.

Me again...In the area you are considering the DTA rules on treaty residence where there is something to be decided that is not clear under SRT rules...this is mainly when a DTA states a source is "only" taxable in one state where SRT resident in both. It does not alter the principle that a person who is SRT resident in the UK (whether resident in one, two or more countries) is liable to UK tax on a source that "may" be taxed by a state. The principle is that if you are SRT resident in the UK your worldwide income and gains are taxable. It is only if the DTA then says a source is taxable "only" in one state that treaty residence is considered. I agree, if Frenchie is SRT resident in both countries he should consult treaty residence but the DTA doesnt say that the property income is taxable "only" in one state, so its irrelevent...it says France may tax it, but he is also already caught under worldwide income principle in the UK, so must include it in his UK return and claim the appropriate tax credit. For "may" read "can" or "is allowed to" not "has exclusive rights to"