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Is Split Year option appropriate?

Am I correct in thinking that my client will not have any UK tax charge in 2018/19?

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My client previously operated a limousine chauffeur hire business and in 2018/19, business was desperate and he decided to cease trading.  He had no turnover in 2018/19 and sold the car on 14th July 2018, which gave rise to a balancing charge of £1,573. I intend to use 14/07/2018 as the cessation date.  He had no other UK income in 2018/19 and left the UK on 15th July 2018 for Quatar.  He did not work there or anywhere else during 2018/19, nor did he return to the UK. In fact so far as I am aware, he has not as yet, returned at all. Am I correct in thinking that allowances will cover the balancing charge and my client will not have any UK tax charge in 2018/19?  I assume a split year option is appropriate but opinions are sought.  TIA.

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By frankfx
27th Jan 2020 21:53

Zero income in 2018/19.

Was he refusing bookings.?

Was his website, if any, closed.

Was the diary closed.

WAs business insurance on the limo cancelled, or was limo loaned to another party?

Was limo parked up in a lock up

May indicate that he had ceased trading in 2017/18. Facts to be ascertained.

The assets at the date of cessation should be valued at that date.

Computer and the like.

The limo should have been valued , a look on Autotrader or Parkers , or a chat with a local dealer.

Or a specialist Limo website to get the value.

Tax return 2018/19 is a red herring.

In the light of the above the 2018 Return may require amendment.

Thanks (1)
By gainsborough
27th Jan 2020 22:58

Re split year treatment, if your client did not move abroad to work full time overseas then he does not meet Case 1. You need to check the RDR guidance to see if he meets Cases 2 or 3. If he doesn't meet either of these, split year treatment will not apply.

Thanks (1)
By David Heaton
28th Jan 2020 12:13

If there's so little income, in the UK or elsewhere, why are you worried about a split year for 2018-19? He is entitled to a full personal allowance (assuming he's a UK or EEA citizen) for the year, whether resident or non-resident, and his income is less than that figure.

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