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  • RE: Rental income from overseas company

    Hi HS123321

    The taxing rights are determined by the Double Taxation Agreement (DTA) in force between Hong Kong and the UK and HMRC’s International Manual.  

    These can be found on our website:

    www.assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/498359/hong-kong-uk-dta_

    and

    International Manual

    If residence (see articles 4 and 5 of the DTA) is in doubt you will see Article 23 of the DTA sets out the Mutual Agreement Procedure.

    If the company was receiving rental income from UK property, it would be within the charge to corporation tax in the UK as a non-resident company landlord :

    Paying Corporation Tax if you’re a non-resident company landlord

    Evidently this is not the case here.

    Thankyou.

    Regards.

     
  • Re: New VAT Page vs old legacy issues

    Hi

    Apologies as this does seem to be a little misleading in that it initially told you that you would receive a repayment of 0.00 as clearly that doesn't make any sense.

    As long as you have spoken to the Vat Helpline and they have confirmed that the repayment is in progress then really you can ignore these online messages,bearing in mind the repayment can take up to 30 days from when you submitted it.

    However if you are still feeling uncertain about the repayment then do call the Helpline again on 03002003700 and we can see where it is in the system and give you any updates that are relevant.

    Thankyou.

    Regards.
  • Re: VAT and a property development company building and selling houses

    Hi

    If your son in law sells new build properties then they will,as you said ,be zero rated as long as all the conditions are met here:

    Zero rating the sale of, or long lease in, new buildings

    When builders are providing the work and raise an invoice they should be invoicing at the zero rate when their services are made in the course of construction of a new build.

    Please refer to guidance here to see detailed conditions for this:

    Zero rating the construction of new buildings

    If your son in law is buying just over the counter supplies then these supplies will be vatable as materials can only be zero rated when they are both supplied and fitted.

    Please refer to following guidance for this:

    Supplies of building materials by contractors

    So the majority of costs will be at the zero rate and for vat that has been correctly charged at 20% then as a property developer he will be allowed to reclaim some of the vat as input tax as described here:

    Developers - building materials and other goods

    For new build properties there is no requirement for certificates but evidence should be kept that clearly shows that a new build is taking place eg planning permission.

    Thankyou.

    Regards.
  • Re: English course expenses

    Hi

    BIM42526 - Specific deductions: administration: own training courses

    Provided it is incurred wholly and exclusively for the purposes of the trade carried on by the individual at the time the training is undertaken, expenditure on training courses attended by the proprietor of a business (either as a sole trader, or in partnership with others) with the purpose of up-dating their skills and professional expertise is normally revenue expenditure, which is deductible from the profits of the business.

    See BIM35660.

    Business purpose test

    In considering the question of purpose, you should not take an unduly narrow view of whether the content of any particular course only up-dates existing skills of the individual.

    But if it is clear that, for example, a completely new specialisation or qualification will be acquired as a result of the expenditure, it is unlikely that the expenditure will be wholly and exclusively for the purposes of the existing trade.

    For general discussion of business purpose see BIM37050 onwards.

    Capital test

    Expenditure on new skills etc may also be capital if what is acquired can be viewed as an identifiable asset of sufficient substance and endurance.

    See Dass v Special Commissioner and others [2006] EWHC2491 (Ch), and BIM35660.

    There is some uncertainty whether the cost of proprietors of a business attending a training course, directly related to the business activity, is deductible in arriving at the [trade] profits chargeable to tax…

    Where attendance at a course is intended to give business proprietors new expertise, knowledge or skills, which they lack, it brings into existence an advantage that is of enduring benefit to the business.

    We take the view that the expenditure is therefore of a capital nature, and deduction is prohibited by [S33 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)].

    On the other hand, where attendance is merely to update expertise etc. which proprietors already possess, the expenditure is normally regarded as revenue expenditure and will be deductible if it satisfies the “wholly and exclusively for the purposes of the trade” test in [S34(1)(a) ITTOIA 2005]’ - see BIM42105.

    You should therefore allow proprietors a deduction for expenditure that merely updates existing expertise or knowledge but disallow any expenditure that provides new expertise or knowledge (particularly where it brings into existence a recognised qualification like a Master of Business Administration).

    Thankyou.

    Regards.



     
  • RE: Self-Assessment - first time

    Hi Czarek

    There are only certain cases where you can offset a capital loss against general income.

    Guidance on these cases can be found here:

    Losses: investment in unsuccessful trading companies

    and

    Share Loss Relief

    Thankyou.

    Regards.
  • RE: Self assessment and help sheets for NRL

    Hi

    For the 21-22 tax return, the deadline would be 31st October 2022.

    Thankyou.

    Regards.
  • RE: Charity Workers who volunteer additional hours - Minimum wage implications

    Hi

    Thank you for your question.

    It is possible for a worker to have more than one contract of employment.

    A worker who qualifies for the National Minimum Wage (NMW) under their contract of employment must be paid at least NMW for their age for the work done under this contract.

    There are a number of issues to consider when determining the status of a worker for NMW purposes.

    In all cases, the situation as a whole is what matters.

    This should be based not only on what has been agreed in writing or orally, but on what happens in practice and the real nature of the relationship.

    If you would like specific advice regarding the contents of contracts of employment, you may want to consider contacting ACAS on 0300 123 1100 or alternatively seek independent legal advice. 

    Thankyou.

    Regards.
     
  • RE: Declaration of beneficial interests in joint property and income

    Hi

    Thank you for your further question.

    As we have stated in our previous answer the default position for a rental property jointly owned by husband and wife is 50-50.

    However if you wish to change this you would have to submit a Form 17 together with the appropriate evidence that the property is split in unequal shares.

    You can complete the Form 17 by following this link:

    Declare beneficial interests in joint property and income

    If you do not have a National Insurance number please quote the Unique Taxpayer Reference (UTR) that you submit your Self-assessment tax returns under.

    Thankyou.

    Regards.
  • RE: Furnished property losses relief

    Hi

    Thank you for your further question.

    The amount of the loss carried forward must be used in the first year that there is a taxable profit even if this reduces your taxable profit to below the personal allowance.

    An example would be if your rental income was £8000, and this was your only income, and you had £5000 of losses brought forward, the full amount of the losses brought forward must be used against your rental income reducing this to £3000.

    If your losses brought forward exceed your profit then you would use the amount of losses to reduce your profit to nil and any balance of losses can be carried forward to the following year.

    If you require any further information regarding this please contact our Self-Assessment helpline on 0300 200 3310.

    Thankyou.

    Regards.
  • RE: Self Assessment needed?

    Hi

    Please find the paper version here along with the relevant notes:

    Residence, remittance basis etc (Self Assessment SA109)

    Thankyou.

    Regards,