Is SA109 necessary if no income remitted?

Non dom, UK Resident client has foreign rental income but has not remitted any of it.

Didn't find your answer?

Sorry for the really basic question (but today I have already tried to dial a number on my calculator and not my phone so I just want to check!)

A client is a Belgian national who came to live in the UK on 30 April 2020. He needs to fill in a self-assessment tax return for 5th April 2021 as his salary was £175k.

His only other income is £10,000 profit from a property rental in Belgium. He has not remitted any of it to the UK.

Does he need to complete SA109 and tick boxes 23 and 28? Or is this only necessary if he actually remits the income?

From SA109 notes:

"Fill in the ‘Residence, remittance basis etc’ pages if you:

  • are not resident in the UK
  • are not a UK resident but you were prevented from leaving the UK because of COVID-19 an you performed UK employment duties in the period you were unable to leave the UK
  • are resident in the UK and:

— are eligible for overseas workday relief (OWR)

— became UK resident during this tax year

— are due split year treatment

— have a domicile outside the UK

— have foreign income or capital gains

and want to use the remittance basis for the 2020 to 2021 tax year."

The way I read it is just tick box 23 and leave 28.

Replies (14)

Please login or register to join the discussion.

avatar
By carnmores
28th Oct 2021 14:21

I would say yes as he appears to have come to UK in tax year and a declaration that they need to claim the remittance basis.

Thanks (1)
avatar
By richard thomas
28th Oct 2021 14:28

It's difficult to see how the client could not be best advised to complete an SA109 if he doesn't put the Belgian rent in the foreign property pages, as his return would then be incorrect and penalties would be exigible. This is because, of course, the remittance basis must be claimed (s 809B ITA 2007) and the SA109 is where the claim is made.

But they need to do more than just tick 23 and 28, as if they tick 23, they must put an entry in 25, 26 or 27. 24 might also be relevant. And if they tick 28 they must complete 34 and 35. So say the Notes for the SA109.

Thanks (1)
Replying to richard thomas:
avatar
By Accountsetc
28th Oct 2021 16:52

Thanks Richard.
Does box 34 (income) need to be completed if he doesn't need to pay RBC? I.e the need to pay the tax requires you to nominate income on which to charge the tax.

My understanding is that for the first 9 years before RBC kicks the only penalty in claiming the remittance basis is that you lose your personal allowance. However, in this case, he has lost his personal allowance anyway as a result of high earnings and so the remittance basis is preferable.

Thanks (0)
Replying to Accountsetc:
avatar
By richard thomas
28th Oct 2021 17:10

As I said, this is what the SA109 (Notes) say under the heading for boxes 34 & 35:

"Boxes 34 and 35 Amounts of nominated income or capital gains

You must fill in boxes 34 and 35 if you’ve put ‘X’ (only) in boxes 28, 31 or 32."

I don't know what the significance of "only" is, as an X is all you can put in those boxes. Perhaps the heading should say "in box 28 and either 31 or 32" which makes sense. If I were completing the form I'd put a £0 in 31 & 32 to ensure that the validity checks don't chuck the return out if they've been programmed in accordance with the heading.

Thanks (1)
By SteveHa
28th Oct 2021 15:19

Well, he could pay the remittance base charge, but that will cost him a lot more.

Thanks (0)
Replying to SteveHa:
avatar
By Accountsetc
28th Oct 2021 15:43

Would he still have to pay this in his first year of being in the UK? I thought that only kicked in after 7 years of residency in the previous 9 years?

Thanks (0)
Replying to Accountsetc:
avatar
By carnmores
28th Oct 2021 15:48

Correct, no remittance charge I presume you are referring to the £30 or £50k charge, doesn't kick in for a number of years

Thanks (1)
Replying to Accountsetc:
By SteveHa
29th Oct 2021 09:02

Ahh, of course. Ignore my brain fart.

Thanks (0)
avatar
By carnmores
28th Oct 2021 17:42

we have gone slightly off topic, OP said no remittance so that is or should be the end of the matter .

Thanks (0)
Replying to carnmores:
avatar
By Tax Dragon
28th Oct 2021 22:44

Really not sure what you mean but there's a high risk you are back-to-front. To explain, I will assume that "the end of the matter" means the 2020/21 overseas income can be ignored (until such time anyway as it is remitted) - ie that no claim is necessary.

Au contraire. It's because there hasn't been a remittance that it's not the end of the matter - that a claim is necessary. The only times (AFAIK) remittance basis applies without a claim are set out in Ss809D and E. This not being one of those cases, a claim is needed. Richard's reply was not off topic. It answered the question.

Thanks (1)
Replying to Tax Dragon:
avatar
By carnmores
29th Oct 2021 14:59

there you go again

Thanks (0)
Replying to carnmores:
avatar
By Tax Dragon
29th Oct 2021 18:24

carnmores wrote:

there you go again

Yeah I realised from the opening response that you did in fact know a claim was needed. I've still no idea what your subsequent posts meant. Apologies if the failure is in my reading, not (or even as well as) in your writing.

Thanks (0)
Replying to carnmores:
avatar
By More unearned luck
29th Oct 2021 15:30

UK resident taxpayers are taxable on their worldwide income. If they are non-dom then they have a choice, at least for some of the time, on how the quantum of their non-UK income is to be measured. They can opt for a method that, on the facts, results in a measurement of zero. That is not the same as having no non-UK income. Of course they opt for the method that results in a zero quantum by making a claim on the relevant pages of their TR.

Thanks (1)
Replying to More unearned luck:
avatar
By More unearned luck
29th Oct 2021 15:44

I add we now live in a world where tax authorities share information. If HMRC receives notification from the tax authority of the source country and HMRC note the absence of the foreign pages from the client's return, a wholly unnecessary enquiry might be commenced.

Thanks (1)