Hi Everyone,
Client has foreign dividends income of $4k from a Country that has double tax treaty with UK and for which non-resident withholding tax at 15% was already deducted by the payer in the relevant Country. Also, he has some small interest income but reasonably large property rental income of $4k for 2016-17. To complicate this further, he also has unused tax losses in the country to the tune of $40k from prior years. My question is should he be declaring foreign income (all three types) especially when tax losses is used, he is not liable for any tax liability in the country of earning and therefore should not be declared for UK tax purposes? Or should the unused tax losses from foreign country be forgotten for 2016-17 for UK tax purposes as historically this was never declared to HMRC? Any help with this query from experts will be highly appreciated as I had very limited dealings with foreign earnings.
Thanks
Replies (4)
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There is not nearly enough information for anyone to give a sensible answer. We don't even know which currency you are referring to. (I can't guess from the clues you have given.) Are those US dollars, Singapore, Australia or other?
Are we to assume he has any UK income? If he's your client, what have you been doing previously with his foreign income?
I don't think it is fair to your client to be piecing together your advice from here and using him as a learning exercise. You need to do some research yourself or admit this isn't your area of expertise and pass the client on to another adviser.
Be careful if he is non UK domiciled since any tax advice you give should take this into account - an accountant was successfully sued a few years ago for not doing so.
If your client omitted the foreign income the last few years then did he claim the remittance basis? It looks as if his income exceeds £2k. https://www.gov.uk/tax-foreign-income/non-domiciled-residents
It may be necessary to file amended returns.
When completing the foreign income sections include the foreign income and the foreign tax on that income, if any and if it is a creditable tax and calculate the amount eligible for double tax relief.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...