Notice Of Compiance Check

Client "may" have had a chargebale event

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Hi all

My client has receved a notice of a check into his 2013/2014 tax return as HMRC has had information from a Life Assurance company that he "may have received a chargeable event gain" and that "no tax will have been deducted by the life assurance company".

HMRC have asked for various items of documentation related to said gain, including details of any previous policy surrenders. It also asks for the source of the income used to purchase the investment.

I'm a bit uneasey as to why earlier year's details required to check this year, as presumably only evidence of one event is held as no doubt they get annual notices of chargeable events and I feel that aking for the source of funds seems to be fishing and not relevent to this year. Also the no tax deducted statement seem odd for a UK chargeble event and as my client's other income was below the personal allowances for that year he is unlikley to have an additional liability if, as I suspect, 20% tax was credit.

There is the threat of  a S29 TMA assessment and also a formal notice to supply info which though not mentioned I assume to be under Sch36 Sec 21 (6) which trumps the Sch36 (1) restriction.

Do I have any scope to suggest that as there is likley to be no loss of tax that (6) above cannot apply or does the fact that it has not been included in the self assessed calculation enough to allow this secion to negate Sch 36 (1) not allowing a notice to be issued?

many thanks 

       

 

 

 

  

   

 

Replies (2)

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By TaxSpud
31st Aug 2016 17:03

No tax deducted suggests an offshore chargeable event. Your client should remember investing in such a policy. They are clearly looking at whether earlier chargeable event gains were made. If an offshore policy then the suggestion is he has non declared offshore income which may have been used to invest in the policy. Seems like reasonable requests to me which the client should be able to clear up.

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By Marion Hayes
01st Sep 2016 21:25

Ask company for a chargeable event certificate. It will have all the information HMRC need

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