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Any Answers Answered: Non-resident UK tax

9th Feb 2017
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The February edition of 'Any Answers Answered', featuring TAXtv hosts Giles Mooney and Tim Good, includes questions on non-resident UK tax and property tax.

The first question taken from Any Answers comes from AccountingWEB member karlmunns who asked a question regarding non-resident UK tax as far as New Zealand is concerned.

He explained that a shareholder of a UK company asked him if he had any liability for the additional 7.5% dividend tax. He said: “no, he needs to declare the income on his NZ tax return,” but then asked whether that was the correct response.

Commenting on the discussion Giles Mooney said tax will be due potentially on the UK dividend tax.

Following the tax rule changes around dividends from April last year, Tim Good explains in the video below the full implications for non-residents. Good goes on to explain that the complications arise when you’ve got other UK income. In this particular example he has rental income from UK property. Quoting various AccountingWEB members who commented on this AA thread, Good outlined some of the key complications.

The second question comes from taxperfect concerning principal private residence (PPR) relief and furnished holiday lettings (FHL). The client buys a property in April 2010 for £100,000 as his PPR, lives there for two months, then it’s used as a FHL and they are satisfied all the criteria are met. He then sells it six years later for £250,000. Giles Mooney asks, do they get PPR?

On the AA thread tax consultant Michael Blake points out that the agent advising this taxpayer should start by questioning the circumstances of the occupation as private residence, given some recent tribunal cases.

Tim Good then moves on to the issue of how to calculate the exempt gain under the main residence exemption rules and how to treat the balance of the gain given the property was used under the FHL regime, which qualifies the gain for entrepreneurs’ relief.  

Find out the full answer, incorporating many comments from the original AA threads, in the video clip below:

For the latest episode of TAXtv visit PTP Interactive. TAXtv is a monthly tax update programme available as an annual subscription from £199, (11 issues plus special editions) to view online, download from the internet or watch on DVD.

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By D R Robinson
10th Feb 2017 15:35

Stamp duty question on Residential property
Client has made a PPR out of old barn on 30 acre farm and has moved into the new building, letting the farmhouse.
If he sells a share, later in the year, to his partner (not married) will she or either of them have any liability for SDLT. The partner's share will also be her PPR once she has sold her current PPR house in the North - and what happens if she cannot sell the house in the North - thank you David Robinson

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