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  • Self Assessment_Tax Calculation

    Hi I have already filed the self assessment return online through the commercial software and I have already received a hard copy of the tax calculation notification. But I could not see this letter from my government gateway account, may I know whether I have already completed the whole tax reporting process? There won't be status updated in the government gateway account. I would expect that there will be a notification in my government gateway for my tax status. rdgs,
  • Marriage Allowance

    If the tax payer has claimed the marriage allowance (transfer in) through the self assessment by using a commercial software and submitted online, does her husband need to do the same by click the transfer out in the self assessment tax return? If both have done this procedure, does the husband need to apply it online through HMRC (assuming the husband transfers the marriage allowance to his wife)? Rdgs, Karen
  • RE: Tax on insurance policy

    Hi Admin 20, I really don't know whether you are fully understand my questions or not. I don't think the withdrawls up to 5% is applicable to this case. In my case example, let assume that the premium paid is GBP100,000, the tax payer has already paid up the premium before the tax payer become the UK tax resident. The tax payer receive GBP3,000 each year from this insurance policy (which is like a saving plan). I believe this GBP3,000 should be treated as interest income. The tax payer has not withdrawn any premium paid, the premium paid in this case is still GBP100,000. The tax payer receives only the GBP3,000 as a annual return for this premium paid GBP100,000. If the tax payer surrender the policy at the beginning of a anniversary date, the tax payer can still receive GBP100,000 premium paid, there is no gain/loss. The tax payer only earn GBP3,000 as an a return for the premium paid GBP100,000. So I don't think the HS321 is applicable to this case. If HS321 is applicable to this case, does it mean that the tax payer has no gain for the annual return GBP3,000 (need not to pay tax on this amount). The tax payer will need to pay the tax on the final year when surrender the policy. For this policy, the tax payer can receive GBP3,000 up to 100 years old, are you saying that the tax payer only need to pay tax at 100 year old if he won't surrender the policy before 100 years old? Then the gain would be GBP3,000 x 45 (assuming that the tax payer is 55 years old when become UK tax resident) at 100 years old. It sounds strange that the tax payer doesn't need to pay when receives the annual return on a yearly basis but to tax it on the final year.
  • Foreign SA106 form

    In SA106 form, box 2 Foreign Tax Credit Relief, there is a note saying that if the tax payer is calculating the tax bill, the tax payer should use Helpsheet 263 to work out the amount. My questions: 1. If I leave this box blank, does it mean that I have not selected to claim the foreign tax credit relief? 2. Will HMRC calculate the foreign tax credit relief for the tax payer if the tax payer leave it blank for box 2? 3. If the tax payer want to calculate the FTCR, what number should be filled in this box 2? Given the following information: a. the tax payer doesn't have any employment income/other income in the UK, but the tax payer has got two sources of foreign income, one is interest/savings income and the other is dividend income. b. The foreign interest is GBP23,000, foreing dividends is GBP26,000 (gross before deduction of foreign tax paid) c. Foreign tax paid for interest is GBP250 and foregin tax paid for dividend is GBP3,500. d. Foreign tax allowed under DTA is GBP2,300 (10% on interest) and GBP3,900 (15% on dividends) e. The UK tax liability on interest is GBP886 = (23000-12570-5000-1000) x 0.2. f. The UK tax liability on dividends is GBP2,100 = (26000-2000) x 8.75%. Please kindly advise which amounts FTCR should be filled in box 2? i. GBP250 + GBP3,500=GBP3,750 or ii. GBP2300 + 3900 = GBP6200 or What is the final UK tax liability? Will it be zero as the tax liability (GBP2,986) can be fully offset by the foreign tax credit relief GBP3,750.
  • RE: Tax on insurance policy

    Hi Admin 20, May I know which section of HS321 has addressed my question? I could not find the relevant section. Thanks
  • Tax on insurance policy

    If the tax payer has an insurance saving plan with an insurance company, the tax payer needs to put certain amounts of money to the insurance company each year and accumulated upto certain amount for 6 years. The tax payer can get about 3% return each year from this insurance plan. If the tax payer died, the beneficiary can get 105% on the principal amount and also the prorata interest. The tax payer is freely to surrender the plan any time after the initial lock period of 6 years. Please kindly advise whether the tax payer needs to pay any UK tax on this 3% return each year? If yes, should this be treated as interest tax or dividend tax? The insurance plan was purhased before the tax payer become the UK tax resident, the principal amounts should be treated as her clear capital as this amount should not be subjected to any UK tax, right?
  • Foreign SA106 form

    If I claim the FTCR and I need to put "X" in column C for any foreign tax paid, do I need to put a "X" in box 2? If the amount put in box 2 same to the total amount put in column C? In the notes of SA106 form, it has stated that the tax payer do not have to work out the FTCR themselves. HMRC will do this for the tax payer if the tax payer has completed other relevant boxes. If that is the case, why the form has this box? If the tax payer fill in an amount, will HMRC use this amount to calculate the tax? Or HMRC will igonre this figure and HRMC will calculate the tax for the tax payer no matter how much that the tax payer has filled in this box? What if the tax payer leave this box blank, does it affect the tax payer tax position?
  • RE: Unable to use commercial software for self-assessment tax return (non-UK resident)

    Hi  I also find the tax return system is not user-friendly, I could not file the tax return online completely as there is one form that I could not file online by using HMRC's system. If I use the commercial software, it requires me to provide the gateway ID and the password to the commercial software provider, May I have ask whether you need to provide the password when you submit the tax return online by using the commerical software system? But the government gateway's page, it always has a warning that we should not share the gateway ID and password to anyone else. I found uncomfortable to provide such password to a third party.
  • RE: Deductible expenses on foreign dividend and interest

    HMRC Admin 25 has answered that the accrued interest should be deducted from the first interest payment so it won't defer for more than 12 months for accrued interest. If the tax payer is willing to purchase a bonds at a premium (paid in excess of the face value of the bonds), the tax payer expects that the coupon interest can compensate the excess amount paid. For accounting treatment, the premium paid on bonds should be amortized over the remaining life of the bonds. For tax purpose, if it doesn't allow to amortize for more than 12 months, then it can be net-off against the interest earned in the tax year when the bonds matured, isn't it? I really don't understand what is the meaning that the premium will not enter into AIS calcuations? The tax payer has made a loss when the bonds matured if the bonds was purchased at a premium. I have read SAIM4070, it sounds it has not addressed my question. Please kindly further clarify.
  • RE: Deductible expenses on foreign dividend and interest

    Any response for my question? I have read through HS343, my understanding is that the premium paid should be netoff against the interest income earned in the tax year when the bonds are matured.