I am taking a quick break from my series of postings on cars and companies for a word on overseas tax.
We have a number of French speaking clients. I have taken calls from a few of them recently expressing concern at the current arrangements for sharing information between the respective tax authorities of Britain and France.
The Government is giving people who have bank accounts, investments, shares, property, and other such assets held in France notice to make a full declaration of all income received from these assets if they have not already done so, and to make this declaration before 30th September 2018. Failure to do so will lead to greatly increased risks of penalties and possible prosecution if you are found to have undeclared income arising from that country.
On principle, it is generally the case that the tax authorities of the country in which you live have first claim on the tax arising on your income. Therefore, if you are living in the United Kingdom and have to complete a Tax Return the normal procedure is to declare on your Tax Return your worldwide income, including income from other countries.
If you paid tax on that income, you can claim credit for tax paid according to the treaty between the United Kingdom and the other country.
If you receive interest or dividends from overseas, in many cases it may make no difference to your tax. At the time of writing, if you receive dividends of less than £2,000 per annum, or interest of less than £1,000 per annum if you are a basic rate tax payer or less than £500 per annum if you are a higher rate tax payer, then you have no additional tax to pay. Given the very low rate of return on cash these days, you would have had to make a substantial investment to receive that much.
The above is the general rule, however there are great many exceptions to it. If you would like specific help or advice relevant to you, please contact our office and we will be most happy to advise you further.
Please bear in mind that no responsibility can be accepted for the consequeany action or omission on your part as a result of reading the above unless you have got in touch with us for specific advice on your own situation.
– By Stephen Handley, FCCA