Member Since: 8th Jun 2007
Tax Partner Smith Kiew Partnership
30th Dec 2016
We've ask the clients to tell us if they have worked more than 3 hours in a day and if about that amount we treat that as a half day and (obviously) 7 hours plus as a full day.
30th Dec 2016
The way we have always worked on this is to apply a "just and reasonable basis" which in your example would be 70/232. In other the OWR should be a relevant percentage of his total workdays for a year.
HMRC have agreed with our interpretation.
29th Nov 2016
Thanks for the comments. I hope I'm not the only tax practitioner who has a sudden doubt on something at this time of year when I really shouldn't!
19th Sep 2016
Thanks for your response. The client has advised us he was on a visa that allowed him to work from the US handling US business. I know nothing about US visas but he was on this basis for 2 years and then came off the UK payroll (P45 etc) and was then transferred to the company's US payroll. He only paid UK tax until part way through 2015 and only US tax from then onwards. It seems that US Returns were not submitted for 2013 and 2014 through ignorance (he thought it a temporary situation and was paying UK anyway). He is returning to the UK shortly.
27th Nov 2015
So if the client was travelling to the US and on a 8 hour flight leaving the UK at 12 noon would you treat that as an overseas workday and the return trip?
I take your point that there is no hard and fast rule and provided it is calculated on a just and reasonable basis HMRC should accept it.
The salary is paid by a UK employer and they have obtained clearance from HMRC to not tax a certain percentage as the client estimated his work abroad at the outset of the tax year (I am now having to complete a 2014/15 Return with the actual figures).
27th Nov 2015
Thanks for your reply. Yes as you say I need to apportion someone's earnings between duties in the UK and outside the UK for OWR. I am assuming I calculate the total workdays for a year excluding weekends, bank holidays etc and apportion those accordingly but what about travel days in and out of the UK and half days? It seems very odd to me that there is no HMRC guidance.
2nd Nov 2015
Thank you very much for that. Just to be clear provided the children are the beneficiaries of the estate they can sleep well with the thought that they will not be required to come up with (up to) 40% of the £250K gifts being made to them now on the basis that the estate will cover all IHT including that on their gifts? They will obviously need to appreciate that if things change drastically to their father's estate e.g care home fees, their father meets someone else (!) it could in theory mean there is insufficient left in the estate then HMRC will come knocking.
30th Oct 2015
Thanks. I thought that the executors could settle the IHT direct from the bank account(s) of the deceased? Am I wrong on that one? Or they could try to borrow the funds on which they qualify for relief on the interest to offset against any income during the period of administration.
What is behind this is one of the beneficiaries would like to repay their mortgage now and will not do so if they have to reserve 40% for 7 years.
29th Oct 2015
Yes, everything to be split equally between the 3 kids apart from some small charitable legacies.
28th Sep 2015
Apologies, perhaps it me that's not making myself clear. The remittance basis applies automatically to my client but as the Jersey interest is less than £2,000 per annum and it is not remitted to the UK the RBC does not apply to her.
The thing I'm more concerned about is how the £150K would be treated as my client has no real idea or record of the origination of the funds. On the basis that she remits the whole amount here she would declare and pay tax on the Jersey interest but how would I treat the rest of the £150K? If HMRC query the issue would they insist on proof of where the funds originated from even if it was 15 years ago plus and if in doubt treat it as income or capital gain?