Tax Question ?
Discussion
Evening all
Was hoping to get some advice on a tax situation that may present itself within the next few months or so.
I've tried searching for this on the interweb and i'm so confused as can't really seem to find an answer.
My Dad is in the process of selling some land that he owns in Poland. He has duel nationality and a bank account in Warsaw which the money would be paid into.
If he were to try and send the money back to the uk would he be charged tax on this ? Any ideas on a % he might be charged ? Are there any ways to reduced the tax amount ?
Everything i've found on the web is all about if you are working abroad or classed as a non uk resident and sending money back and not sure this applies. It would be a one off payment, nothing to do with work or a salary and we (the family) are all uk residents.
Basically would he pay tax on bringing the money to the uk or do we all pick up sticks, move abroad, and go and large it up polski style ?
Any help or thoughts would be much appreciated.
P.s I'd really rather not say how much money is involved on a public forum but does the amount have a bearing on any of this ?
Was hoping to get some advice on a tax situation that may present itself within the next few months or so.
I've tried searching for this on the interweb and i'm so confused as can't really seem to find an answer.
My Dad is in the process of selling some land that he owns in Poland. He has duel nationality and a bank account in Warsaw which the money would be paid into.
If he were to try and send the money back to the uk would he be charged tax on this ? Any ideas on a % he might be charged ? Are there any ways to reduced the tax amount ?
Everything i've found on the web is all about if you are working abroad or classed as a non uk resident and sending money back and not sure this applies. It would be a one off payment, nothing to do with work or a salary and we (the family) are all uk residents.
Basically would he pay tax on bringing the money to the uk or do we all pick up sticks, move abroad, and go and large it up polski style ?
Any help or thoughts would be much appreciated.
P.s I'd really rather not say how much money is involved on a public forum but does the amount have a bearing on any of this ?
Eric Mc said:
Is he Domiciled in the UK?
Note - domicile is NOT the same as being a UK Tax Resident.
I presume he is a UK Tax Resident but as you state he has dual nationality. I assume he was born in Poland and he could very well still have a Polish Domicile.
Definitely domiciled in the UK. Has been since he was 4 years old when he came over due to the war and has lived and worked here ever since.Note - domicile is NOT the same as being a UK Tax Resident.
I presume he is a UK Tax Resident but as you state he has dual nationality. I assume he was born in Poland and he could very well still have a Polish Domicile.
Also definitely a UK Tax Resident, now retired.
Are you sure about his UK Domicile?
In UK Law, domicile is where you were born. Unless you deliberately break all ties with your old country, you may not have changed domicile to your adopted country.
The fact that he has "dual nationality" AND owns land and property in that country leads me to believe that he has not broken those ties.
In UK Law, domicile is where you were born. Unless you deliberately break all ties with your old country, you may not have changed domicile to your adopted country.
The fact that he has "dual nationality" AND owns land and property in that country leads me to believe that he has not broken those ties.
Eric Mc said:
Are you sure about his UK Domicile?
In UK Law, domicile is where you were born. Unless you deliberately break all ties with your old country, you may not have changed domicile to your adopted country.
The fact that he has "dual nationality" AND owns land and property in that country leads me to believe that he has not broken those ties.
Ah ... In that case I'm not sure. Will have to have to find out exactly from him. In UK Law, domicile is where you were born. Unless you deliberately break all ties with your old country, you may not have changed domicile to your adopted country.
The fact that he has "dual nationality" AND owns land and property in that country leads me to believe that he has not broken those ties.
If he hasn't changed domicile to the uk any ideas what that will mean ?
Thanks for help so far.
Here is the situation if you are a UK Tax Resident but have a non-UK domicile -
You are liable to Income Tax and Capital Gains Tax on income generated in the UK.
You are only liable to UK Income Tax and Capital Gains Tax on income or gains generated outside the UK if you REMIT that money into the UK. If you leave it offshore, you will not pay UK taxes (although you may need to pay the appropriate foreign taxes in the country where the income was generated).
Domicile and residency status can be very tricky areas and I would strongly advise your father to get good professional advice - especially if the potential tax bills are high.
You are liable to Income Tax and Capital Gains Tax on income generated in the UK.
You are only liable to UK Income Tax and Capital Gains Tax on income or gains generated outside the UK if you REMIT that money into the UK. If you leave it offshore, you will not pay UK taxes (although you may need to pay the appropriate foreign taxes in the country where the income was generated).
Domicile and residency status can be very tricky areas and I would strongly advise your father to get good professional advice - especially if the potential tax bills are high.
Eric Mc said:
Here is the situation if you are a UK Tax Resident but have a non-UK domicile -
You are liable to Income Tax and Capital Gains Tax on income generated in the UK.
You are only liable to UK Income Tax and Capital Gains Tax on income or gains generated outside the UK if you REMIT that money into the UK. If you leave it offshore, you will not pay UK taxes (although you may need to pay the appropriate foreign taxes in the country where the income was generated).
Domicile and residency status can be very tricky areas and I would strongly advise your father to get good professional advice - especially if the potential tax bills are high.
Thanks so much for that. Will definitely get him to seek the appropriate advice. You are liable to Income Tax and Capital Gains Tax on income generated in the UK.
You are only liable to UK Income Tax and Capital Gains Tax on income or gains generated outside the UK if you REMIT that money into the UK. If you leave it offshore, you will not pay UK taxes (although you may need to pay the appropriate foreign taxes in the country where the income was generated).
Domicile and residency status can be very tricky areas and I would strongly advise your father to get good professional advice - especially if the potential tax bills are high.
Cheers again.
Summary of the Finance Act 2008 changes to the residence and domicile rules
* Most individuals who are entitled to use the remittance basis of taxation now need to make an annual claim to do so.
* Individuals claiming the remittance basis of taxation, where they have unremitted foreign income or gains of £2,000 or more arising in the tax year, lose their entitlement to personal allowances and the annual exempt amount for capital gains tax.
* The introduction of an annual £30,000 tax charge for adult remittance basis users resident in the UK in the current year and for 7 or more of the previous 9 years where they have unremitted foreign income or gains of £2,000 or more in the current year.
* Changing the day counting rules that determine when someone becomes resident in the UK under the 183-day rule to count as a day any day upon which an individual is in the UK at the end of that day (i.e. at midnight), subject to a new rule for transit passengers.
* Closure of a number of loopholes and flaws in the remittance basis that allowed people to bring untaxed income or gains into the UK tax free.
My understanding is that if you are long term resident in the UK, you are now automatically UK Domiciled unless you opt to pay the £30000 annual tax charge to protect the gains you make outside the UK.
The rules really tightened up in the last few years so assume the worst. My guess is that the gain may have to be declared and tax paid in the uk if greater than annual exemption.
But as said in previous post, get expert opinion.
JB
* Most individuals who are entitled to use the remittance basis of taxation now need to make an annual claim to do so.
* Individuals claiming the remittance basis of taxation, where they have unremitted foreign income or gains of £2,000 or more arising in the tax year, lose their entitlement to personal allowances and the annual exempt amount for capital gains tax.
* The introduction of an annual £30,000 tax charge for adult remittance basis users resident in the UK in the current year and for 7 or more of the previous 9 years where they have unremitted foreign income or gains of £2,000 or more in the current year.
* Changing the day counting rules that determine when someone becomes resident in the UK under the 183-day rule to count as a day any day upon which an individual is in the UK at the end of that day (i.e. at midnight), subject to a new rule for transit passengers.
* Closure of a number of loopholes and flaws in the remittance basis that allowed people to bring untaxed income or gains into the UK tax free.
My understanding is that if you are long term resident in the UK, you are now automatically UK Domiciled unless you opt to pay the £30000 annual tax charge to protect the gains you make outside the UK.
The rules really tightened up in the last few years so assume the worst. My guess is that the gain may have to be declared and tax paid in the uk if greater than annual exemption.
But as said in previous post, get expert opinion.
JB
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