income abroad and tax returns for non domiciled uk resident

pksaraf

I have read a lot of posts but still do not seem to get an answer, wondering if someone could help?

I have been working in UK on a work permit for 3 years now, which means i am a uk resident but not domiciled. I have some investements in my home country. As i understand, if i do not remit the income to UK from my investements abroad i am not liable to tax in UK ( I pay tax on them in the home country). What I do not understand is that am I still supposed to show them on my UK tax return and then deduct them from the calculations as they are not remitted to UK? Or can I simply ignore them? In UK, I only receive a standard salary and some income from savings, so have never filled a tax return.

Any ideas?

Cheers.

pchelpman

If you are definitely NOT UK domiclied then any income worldwide - no matter where it is outside the UK - is not taxed in the UK UNLESS you bring it here.

No need to declare anything not remitted to the UK.

To avoid "discovery", and the decisions handed down in the Valtema case, you should tell the Revenue what you have done and why.

Tell them in the "white space" section in the Tax Return why you are not decalring the non-UK income and complete the non-domicled supplementary pages with fill details.

Also - IF you can - you should complete Revenue form DOM1 but this isn't used much nowadays as we are all under "self assessment".

Tax planning tip - keep your overseas money in two accounts. One called "capital" and the other called "income". Thew capital acocut sgould comprise the money ypou had overseas just before you cane to the UK.

Have any subsequent interest/dividends and other overseas income after you came to the UK paid into the "income" account.

That way, if you need money, bring it to the UK from the "capital" account so the Revenue can't tax it as "income".

Cook_County

1. I am not certain why pchelpman thinks that the DOM1 is not used much any more. I would always use this form BEFORE filing a UK tax return to obtain a formal non-UK domicile ruling.

2. You may have been entitled to tax reliefs such as detached duty if your original assignment was intended to be for less than 2 years or relief for income relating to non-UK workdays if you are not ordinarily resident in the UK.

3. If you are not UK domiciled you could claim corresponding relief for contributions to non_UK pension plans.

4. If you are not UK domiciled your savings accounts should held offshore (eg Channel Islands or Isle of Man) to avoid paying any tax on the interest credited.

5. The definition of remittanced for UK tax purposes is drawn quite widely and includes using ATMs in the UK or non_UK credit cards, ensure that all remittances are tracked before filing the UK tax return.

pchelpman

I make that comment because, following the introduction of self assessment, it is expected that individuals will “self certify” their domicile status. The Revenue is not using this form as widely as they once did.

DOM1 should be submitted where no tax return has been submitted before. The Revenue have had spates of not accepting a DOM1 form where you have "self-assessed" yourself as being non domicile.

Tax Bulletin 29 provides a good summary –

https://www.hmrc.gov.uk/bulletins/tb29.pdf

pksaraf

that was really helpful and spot on pchelpman and cook_county thanks for that. I will file my returns as said!