Mistake funding ISA after moving abroad - help needed
Options
curval
Posts: 1 Newbie
Hello,
my brother was not aware of the regulation that restricts funding ISAs to UK residents, so he kept funding his ISA with the yearly allowance over the last 3 years despite having moved back to Egypt.
What is the best course of action? Contacting HMRC and informing them about the mistake? I have read that the consequences might even be that he would be considered a UK resident for all the 3 years and would have to pay UK tax on worldwide income for this whole period, is that true? It seems absurd for a mistake like this.
He always wanted to do things right so he did declare to HMRC he was moving abroad and he did pay UK tax on other UK income (rent of his old apartment) as a non UK resident.
Help me understand the situation and best remediation please.
Many Thanks!
my brother was not aware of the regulation that restricts funding ISAs to UK residents, so he kept funding his ISA with the yearly allowance over the last 3 years despite having moved back to Egypt.
What is the best course of action? Contacting HMRC and informing them about the mistake? I have read that the consequences might even be that he would be considered a UK resident for all the 3 years and would have to pay UK tax on worldwide income for this whole period, is that true? It seems absurd for a mistake like this.
He always wanted to do things right so he did declare to HMRC he was moving abroad and he did pay UK tax on other UK income (rent of his old apartment) as a non UK resident.
Help me understand the situation and best remediation please.
Many Thanks!
0
Comments
-
Sounds absurd to me too, where did you read this? The regulations around residency are complex but ultimately well-defined so the concept of arbitrarily being considered a UK resident simply by virtue of contributing to an ISA doesn't sound credible to me!I have read that the consequences might even be that he would be considered a UK resident for all the 3 years and would have to pay UK tax on worldwide income for this whole period, is that true? It seems absurd for a mistake like this.
Has he updated his address with his ISA provider? If he has, then they shouldn't have accepted further contributions, but if he hasn't then he should now do so. Either way round, I suspect that discussing with them rather than HMRC should be the first port of call....0 -
Worst case the ISA subscriptions will be considered invalid and will be removed from the ISA.
Presumably your brother made some kind of declaration in each tax year when he first subscribed to the ISA. This may or may not have required him to confirm his eligibility. But it sounds as though it is the ISA provider's error presuming they were made aware he had moved abroad.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608.1K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards