Non domicile tax returns

Non domicile tax returns

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I have a non-domiciled, UK resident client who has no UK source income. The only income is US investment income, taxed in America and totalling $40,000 gross. Calculations show that there is no UK tax due, either on the remittance basis ($25,000 remitted) or the non remittance basis. If he were a UK domiciled individual there would be no need to notify. HMRC have told the client to fill in the foreign pages of UK return and that there will be penalties for non-disclosure and late filing.

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By pjones
18th Sep 2013 16:28

Late Returns

If HMRC have previously issued tax returns for completion and these have not been submitted then it is likely that late filing penalties will be charged.

If HMRC are only now asking for tax returns then the filing deadline is 3 months from the date the returns are issued.  If these are submitted inside this 3 months then no late filing penalties can be charged.

On the basis that your client has no UK tax liability then there can be no late payment penalties or interest. 

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Replying to lionofludesch:
Red Leader
By Red Leader
18th Sep 2013 17:00

years of residence

How many years has the client been UK resident?

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Replying to DJKL:
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By Lou Kelly
23rd Sep 2013 10:18

Client has been resident for 3 years. Returns have been issued at clients request.

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By David Treitel
24th Sep 2013 17:24

You will want to ensure that the UK returns claim credit for US tax at the treaty rate (eg 15% on dividends), and look carefully at the US investments for offshore income gains or other items where US and UK tax rules diverge.

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