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Income arising in the UK to Non-Doms/Non Residents

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Uk Company client paying ( during 18/19 ) in excess of £ 100 K to a Bank A/C in Jersey in the name of husband & wife who are, as far as their UK Tax position is concerned Non-Doms / Non Residents. The payments relate to genuine commission payments relating to sourcing contracts in Africa - invoices & e-mails support the relevant payments.

Currently having the discussion with our client concerning money laundering etc etc. However we have also become tasked with completing the Non-Doms UK Tax Returns as they are in receipt of Rental Income. My arguement is that as the Commission Income arises in the UK ( irrespective as to where it paid )  it has to be declared on their personal returns.

Do not get involved much in queries of this nature - am I on the right lines

 

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By Matrix
16th Dec 2019 20:30

If you don’t have international tax experience then refer to someone who does.

I think the bigger issue is whether the company is managed and controlled in their country of residence so they should get local tax advice first.

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Caroline
By accountantccole
17th Dec 2019 10:06

Why is the commission UK income? If they were unrelated (your post isn't clear whether they are or not), all work done to generate the commission is overseas, I would have thought it is taxable there.

Realm of other issues if they are also shareholder / directors, liaison with local accountant recommended

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By carnmores
17th Dec 2019 13:46

1. check that the recipients are not involved in the ownership or control of the paying company. (see Matrix comment )
2. check the statutory residence test

if all clear and the work which lead to the commission was carried out abroad it is not taxable

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By Matrix
17th Dec 2019 19:22

Sorry I should have stated as an assumption that the shareholders of the limited company client and the husband and wife for whom Yorkieboy is completing UK tax returns are the same individuals. Maybe he will come back and advise.

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By YorkieBoy
18th Dec 2019 14:41

To clarify - the Directors of the UK based business are NOT the individuals for whom I am completing the 18/19 Income Tax Returns. Other than an arms length business relationship, there are no other "links" between the two sets of individuals.
Apologies - it was not made clear. As regards the place where these commissions are generated, the ultimate customers are in Africa although frequents visits are made by my clients to both the UK & other countries to negotiate deals etc.

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By carnmores
18th Dec 2019 19:22

ok so it all comes down to where the work is done and this looks tricky . my view is that you would apportion the income on the basis of days worked in the different territories unless you know of a better way. then you would claim DTR in the country of residence for uk tax paid, i'm not sure about this maybe another person could comment

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By Matrix
18th Dec 2019 22:51

So it is not a UK company client then? Apologies but you need to change your opening sentence.

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By carnmores
18th Dec 2019 23:17

i don't understand what you are saying

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By Matrix
19th Dec 2019 00:04

It is the OP who needs to clarify how a limited company client is paying commission to two unconnected individuals who are both clients and why he thinks this is UK source income. I have already apologised for not understanding the set up.

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