doughza

doughza

New foreign income tax laws. From 08/09 the law has changed - New threshhold GBP2000 - anything below no problem - anything above 20%(for most) But! here is the rub anything above will incur 20% on all of the GBP2000 plus the the portion over GBP2000 (from the horses mouth) This seems unfair - Surely one should incur tax only on the portion over GBP2000. Surely everyone should be entitled to the GBP2000 tax free bit! - How does one go about challenging these things - cheers

mrkbrrws

My understanding is that you wouldn't pay tax on the £2,000 because that is a limit on unremitted income/gains and if you are claiming the remittance basis you would only pay tax on foreign income/gains remitted to the UK.

If the changes to the remittance basis affect you, I think you need to read http://www.hmrc.gov.uk/nonresidents/coming_to_the_uk.htm and/or get professional advice.

The consequences of claiming remittance basis with unremitted income/gains over £2,000 appear to be:-

a) You lose UK personal allowances.
b) If you are over 18 and have been UK resident for 7 of the last 9 tax years you have to pay £30,000.