HMRC Admin 32 Response

Hi,

As the pension pot is held in the Isle of Man, we need to review the double taxation agreement with the UK and the Isle of Man. 

Isle of Man: tax treaties

Article 17 covers pensions and advises that pensions and lump sums paid to a resident of the UK, shall only be taxable in the UK. You will need to submit a request for a certificate of residence.

How to apply for a certificate of residence to claim tax relief abroad

You will need to include details of the pension lump sum, including a gross amount. HMRC will send you a certificate of residence, which you should send to the Isle of Man tax authorites, to claim repayment of any tax deducted from the lump sum.

Thank you.

Hi Rafael,

The 7 year rule is for inheritance tax reasons as the gift would be included in part of the estate if the gift was over £3000 and was received within 7 years of the gifter passing away. This is for UK inheritance. You dont declare it as income for yourself unless it generates any interest or dividends.

Thank you.

Hi Jay,

That is correct - see guidance at:

Selling online and paying taxes - information sheet

Thank you.

Hi,

No as this would be a normal commute to work as the office space is provided.

Thank you.

Hi,

As it is paid in 2023 to 2024 year, the tax due will be based on your annual income for that year. As paid in April, 40% is correct on those figures.

Thank you.

Hi anbujoe,

The money given as a gift is taxable income and will beed to be declared.

EIM01450 - Employment income: gifts and other voluntary payments

With regards to the property purchase, how you fund the purchase is up to you. You can borrow money from financial providers by way of a mortgage. This is not taxable income.

Thank you.

Hi S Hughes,

The carry forward of unused allowances is only applicable when you have exceeded your annual allowance of £40,000 to reduce any pension savings tax charge that may be due. You can only claim relief on pension contributions in the actual tax year that they are paid and in your case your maximum will be £2880 as a non tax payer. You are correct in that it is not an allowance, but a rleief, and it is as you say a use-it-or-lose-it scenario.

Thank you.

 

Hi,

If you can actually access the funds to withdraw them then the interest is declared in the year it is added.

SAIM2440 - Interest: taxation of interest: when interest arises

Thank you.

Hi,

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

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 GOV.UK will help you work out if split year treatment applies. 

Thank you.

Hi Suresh,

It may be taxable on the remittance basis. see further guidance at:

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.