HMRC Admin 32 Response
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RE: QROPS 5 Year Tax Rule
Hi Tammy,
To obtain full QROPS benefits you must leave the UK for more than 5 full tax years. If you wish to access your QROPS in less than 5 years then there can be significant tax issues.
In particular, if you access a large amount of the fund while outside of the UK and then return to live in the UK, all within a 5 year period.
Doing so may mean that you fall foul of an anti avoidance wording in ITEPA 2003 s.574A which can hit a pension saver even if there was no intent to avoid tax.
According to the wording, when someone withdraws flexi-access pension payments during a non-UK residency, should the non UK residency not exceed 5 years, then any “relevant withdrawals” are to be treated under foreign pension tax rule as if they arose in the year of return and s.576A (7) specifically overrides any double tax treaty.
A Relevant Withdrawal is an amount (other than an annuity) that the member is paid from the member’s drawdown pension fund or flexi-access drawdown fund.
If the amount exceeds £100,000 as a withdrawal then the nature of that payment will determine if the QROPS holder is liable to UK Income Tax:
If the payment had an element of Pension Commencement Lump Sum (PCLS) then the threshold is not likely to be exceeded and HMRC will have no interest in this.
However, if the £100,000 was an income withdrawal then any amount above this will be taxable by HMRC.
Thank you. -
RE: Foreign Tax Credit Relief on overseas dividends
Hi Ben,
The drop down is in order to show the maximum relief that can be claimed. As relief is restricted to the UK tax that is due on the same source, you may not actually get 15%. further guidance is at:
Relief for Foreign Tax Paid 2023 (HS263)
Thank you. -
RE: Going self employed, already have UTR
Hi,
No, you dont need a new UTR. You will tailor your return to answer yes to self employment to include this new source. You will need to register to pay Class 2 NI.
Thank you. -
RE: Rounding disposal proceeds
Hi,
You will round down.
Thank you. -
RE: Self-employed \ Property Income
Hi,
Rental income is not normally a business and as such is not liable to class 2 NI. Please see guidance below as to why.
Working for yourself
You will therefore only declare it as income from property.
Thank you. -
RE: Is Remittance based taxation applicable for RSUs of a US company?
Hi,
If you are resident, but not domiciled in the UK, then you can elect to claim the remittance basis and no pay tax on the unremitted RSUs. If you use the 'arising basis', which is the default tax method in the UK, then you would need to declare your world-wide income, which would include the RSUs. You would be able to claim a tax credit for the overseas tax paid. You would need to decide which method suits you best.
Have a look below for more information.
Residence, domicile and the remittance basis: RDR1
Thank you. -
RE: Do stipends count as taxable income?
Hi,
Please refer to:
EIM06210 - Employment income: scholarship income: payments taxable as employment income?
Thank you. -
RE: 2 Stocks & Share ISA's should I close one ?
Hi,
If both stocks and shares ISAs were opened in the same tax year, then this is not permitted and the newest ISA would need to be closed. If they were opened in different tax years, then they are both allowable.
Have a look at the guidance at:
Individual Savings Accounts (ISAs)
Thank you. -
RE: CGT on divorce - divorce final order obtained before consent order approved by court
Hi,
Please have a look at the guidance below, as you may have to pay Capital Gains Tax on assets you transfer after your relationship has legally ended.
Money and property when you divorce or separate
Thank you. -
RE: Remote consultancy paid in Euros = "foreign income"
Hi,
As a non domiciled resident of the UK, you are taxed by default using the 'arising basis' on your world-wide income, even if you do not bring it to the UK (remit). This means that you would declare your overseas consultancy fees under self employment (SA103) and if your paid foreign tax, you would also declare on SA106 and claim a foreign tax credit.
As a non domiciled resident of the UK, you also have the option to use the remittance basis. If you choose to use the remittance basis, then you can declare the overseas income and capital gains that you did not remit to the UK, so that you do not pay tax on it in the tax year that it arises. You would, however, pay tax on it in a later tax year, if you bring it to the UK in that later tax year.
Have a look at the guidance on remittance basis at the link below, as you will need to decide if the remittance basis is right for you.
Residence, domicile and the remittance basis: RDR1
To claim the remittance basis, you will need to complete SA109 as part of your tax return.
Thank you.