Tax Dragon wrote:
I'd love to understand the logic. Having suspected that the NRCGT rules trump everything, you form the view that the ENTIRE gain will become taxable on his return to the UK.
Please read the rules. To give you a clue, s14B is even headed up "meaning of 'non-resident CGT disposal'".
Thanks for your reply. Apologies that my question wasn't properly structured.
Upon his return to the UK, and the resumption of UK residence, he will no longer be subject to the NRCGT rules (because he is not Non Resident). I was asking if he would still be able to re-base in these circumstances, similar to how companies are able to do so wef 6 April 2019 if they become UK resident.
I was also asking if it makes any difference that he purchased the property during a period of non-residence and that if he sold it whilst still non resident will this mean it is entirely exempt (as would other non-property assets generally), or would the NRCGT rules override this and bring it into charge? In other words, do the NRCGT rules apply to ALL UK properties, regardless when they were acquired?
Thanks anyway for your time and for the link to S14B which I shall look at.
Thanks for your reply.
For the year in question, then no he wouldn't meet the third auto overseas test because he hasn't been full time working, etc. (got married and had a lonnnnnngggg honeymoon!).
So, yes, would be looking at the auto UK tests, but I kind of hope that it won't have to come down to that on the basis of a successful exceptional circumstances claim. But looking through RDR3, and HMRC's published thinking, I don't think he can rely on that.
Justin Bryant wrote:
HMRC need to tell you the legislative justification for this purported 4 year time limit, as in the absence of a discovery assessment, determination or closure notice etc., I am not aware of any such SA100 filing time limit following the issue by HMRC of a notice to file.
TMA S8B(6)(b) may provide a way out.
Thanks, I'll try that.
Justin Bryant wrote:
Can't she notify HMRC of some (small?) undisclosed liability for that year so that HMRC then have to send her a notice to file a tax return. From memory the FTN penalties are tax geared and the late filing penalties from that year may be less than the POAs. (If she was sent a 2012/13 notice to file then I can't see how a 2012/13 tax return she sends HMRC can be rejected as being out of time in the absence of a CN or DA etc.)
That may be a rubbish suggestion however and you would need to check all that.
Thanks, and yes she was sent a Notice to File (presumably on 6 April 2013), but HMRC will not process if it is over 4 years late.
Was there absolutely no income other than paye in 12/13?
I don't have expert knowledge in the area of POAs but has the question been put to hmrc that your client was in employment in that year and so POAs would have beeen refunded? Ask exactly where payments on account will be allocated since there were no other taxable income?
It seems ludicrous to me that they can demand POAs for a year in which they are being told the only income was taxed at source.
Thanks, and I agree, it does seem ludicrous. But from the legislation this is the position the client finds herself in. HMRC won't process her 2012/13 Tax Return (which would assess the correct liability) because it is out of date. Special Relief won't apply because HMRC did not issue a Determination. The POA's cannot be reduced (on a back-dated basis). Hence, she's stuck with the POA's.
OK, I see, thanks for the responses.
So, S223(3) deems the property as being occupied as a residence, thus there are deemed to be two properties occupied simultaneously (they don't need to be owned, merely occupied as a residence), thus an election under S222(5) is possible. And so actual occupation is not necessary. ESCD21 allows a late election in the case, for example, of someone who doesn't know if they'll be moving back in after their return to the UK (and thus doesn't know if S223(3) will apply).
Surely that election only applies if he owned more than one residence?
You'd have thought so, however...
This makes reference to a) "tenancy" (para 2) and also b) "from which the individual is absent" (para 2). So I assume it means that a) tenancy is "owned" for the purposes of the election, and also that b) an individual doesn't have to have 'as his home'.
As a 'one-man-band' requiring only a single-user licence, the cost to me will be very reasonable, particularly if the Practice Management Software comes as part of the package at no extra cost. Waiting in anticipation for some news on this.