Letter from HMRC regarding foreign income

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    Letter from HMRC regarding foreign income

    I have received a rather rude letter from HMRC accusing me of not declaring foreign income/gains. This is a mystery to me, as for over twenty years I have sent all my papers to my UK accountant to interpret. Accompanying the letter is a questionaire giving four options to tick.
    1.) I need to bring my tax affairs up to date.

    2.) I believe I have declared all my overseas income & gains. This further asks what tax year, and in what box was it entered.

    3.) I have not declared them as they are covered by personal allowance

    4.) I have not declared them as they are not liable to UK tax.


    My accountant has suggested I reply by letter to avoid accidentally making a false declaration, but has not suggested the text of such letter.

    Any thoughts?

    #2
    Have you had any overseas income (or gains) in the last seven years?
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Originally posted by jpkeates View Post
      Have you had any overseas income (or gains) in the last seven years?
      Yes. But all notified to my accountant, (and foreign pages completed every year.)

      Comment


        #4
        I'd ask your accountant to respond, then.
        It's basically their work that's being queried, not yours.

        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          It is interesting to read this post this morning given that in the a Trade Publication the following article appeared which might be of interest to Forum Readers.

          "HMRC are sending out 14,000 'nudge' letters to people who have sold a residential property during the 2018/19 tax year asking them to check whether they owe Capital Gains Tax, according to tax and advisory firm Blick Rothenberg.

          However, the firm says there is a "more immediate problem".

          Suzanne Briggs, a partner at the firm said: Anyone who has sold a property after April 6th this year where there is CGT to pay, should have reported the disposal and paid the CGT within 30 days of the sale. A late return will incur a late filing penalty and interest on the late payment of the CGT.

          “There has been little publicity about this new regime and the short filing deadline will catch many people out. HMRC should be proactively educating taxpayers rather than penalising them for late filing after the event. Anyone who thinks that they owe money should deal with it now or they could face fines and interest charges.”

          “The‘nudge’ letter relating to the 2018/19 tax year will invite taxpayers to review their CGT position and either amend their tax return or make a disclosure. Taxpayers will be alarmed by receiving these letters, but they should take care not to ignore them and to take immediate advice or they too could face fines and interest charges.

          "HMRC are targeting the letters at individuals who have sold a property which may not have been their main home. It is unclear how HMRC will conclude that a particular property may not have been a taxpayer’s main home, but from my experience of previous nudge letter campaigns, HMRC do not generally undertake any internal checks to verify the information they hold and so taxpayers can receive a letter where there is nothing to disclose.

          “It is important to be aware that main residence relief (which exempts a capital gain on the sale of a property) only applies in full if a property has been your “only or main residence” throughout your ownership. The legislation around main residence relief can be complex if you have not lived in the property as your main residence throughout or you own more than one property. It is not always the case that main residence relief applies to the property being sold.”

          Comment


            #6
            They often just check stuff randomly -- if you lied (or your accountant lied on your behalf) then you will be in trouble. I have had various random checks at least 5 times in the past 20 years. If you can't justify your return you might find yourself subject to a complete tax audit, and will be watched with a hawk eye for ever more.

            Someone might also have reported some suspicion. I regularly report people who I think are not paying tax.

            Comment


              #7
              If you have kept a copy of the tax returns for last 6 years, I suggest you make a review to check if any info was omitted by your accountant . Recently banks in many overseas countries have joined a reporting system to inform their local tax office of any bank account opened for clients with overseas address and this info gets passed on to the overseas tax office.

              Comment

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