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- Are You Claiming The Right Amount? Gated
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- Audit and Assurance
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- Bundle and Pricing Options
- BUSINESS SERVICES INSIGHTS
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- CAPITAL ALLOWANCES
- CAPITAL GAINS TAX
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- Contact Thank You
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- Creative Tax Reliefs
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- Early Stage To SME- WHAT OUR CLIENTS SAY
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- Eddie Latham & PJ Scott – Co-founders, Velocity Commerce
- EDUCATION
- EMPLOYMENT TAX
- ENVIRONMENT
- FAQS
- Financial Reporting
- Find Us
- Flexible ‘Finance Bench’
- Future Events
- Galahad Clark – Founder VivoBarefoot
- GLOBAL TALENT PROGRAMME
- GRADUATES
- HEALTHCARE INSIGHTS
- Helena Hills – Founder & CEO, TrueStart
- HIGH GROWTH LOW DOWN
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- Inheritance Tax
- Intellectual Property & Patent Box
- INTERNATIONAL TAX
- Investment Calculator UK
- James Hyde – Founder & CEO, James and James
- Jay Richards & Cat Agostinho – Co-Founders, Imagen
- Justin Harling – CEO, CAE Technology Services
- LEGAL STUFF
- Let’s Stop Calling It R&D V2 Gated
- Life at cooper parry
- Lounge Underwear Webcast
- MAKING TAX DIGITAL
- Management Information and Reporting
- Manufacturing and Supply Chain
- Marketing Thank You
- MID MARKET – WHAT OUR CLIENTS SAY
- Mid-Market
- New Hub CP
- New Hub CP Live Lounge
- Newsletter Form
- Newsletter Thank You
- NFP Webcasts And More
- NOT FOR PROFIT
- Not For Profit Audit
- Operational Systems & Technology
- Our People
- Meet the Team
- Meet the Team Retail
- Our People – Big Business
- Our People – Board
- Our People – Business Tax
- Our People – Capital Allowances
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- Paul Turton – CEO, Pact Coffee
- Payroll
- PENSIONS AUDIT
- Personal Tax
- Personal Tax Compliance
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- Preference Centre
- PRIVACY POLICY
- Private Equity Advisory
- PROFESSIONAL SERVICES
- PROPERTY
- PROPERTY AND LANDLORDS
- R&D Capital Allowances
- R&D Newsletter Thank You
- R&D Tax Credits Questionnaire: Are you eligible?
- Raise investment or debt
- Raising Finance
- Read All About It
- Rebelution 2
- Rebelution 2 Top Tips – Cooper Parry Corporate Finance
- Rebelution 2 Top Tips – Cooper Parry IT
- Rebelution 2 Top Tips – Cooper Parry Wealth
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- Rebelution 2 Top Tips – VAT & Brexit
- Research & Development Tax Credits
- Research And Development Tax Credits
- RESIDENCE & DOMICILE ADVICE
- Retail
- Retail Advisory
- Retail Tax
- Rob Law MBE – Founder, Trunki
- Scale Up & High Growth
- SECURITY POLICY
- Service Charge
- Service Charge Accounts
- Service Charge Snapshot
- Service Test
- SETTING UP BUSINESS IN THE UK
- SHARE INCENTIVES AND REWARD
- Share incentives: Annual Reporting
- SHAREHOLDER TAX ADVICE
- Shaun Doak – CEO, React Group Plc
- Small Business
- SNAPSHOT
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- TEN STAGES TO SALE
- Test2
- This Is Us
- Tom and Tina Warner – Co-Founders, Warner’s Distillery
- TOPICAL TAX UPDATES
- Transaction Deals
- Transaction Services
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- TRANSACTION TAX
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- Trusts and Estates
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According to HMRC, 1 in 10 people in the UK have an offshore financial interest.
Now, you may be aware that HMRC have been cracking down on taxpayers declaring their offshore interests to make sure they’re paying the correct tax following their ‘No Safe Havens’ strategy from 2019.
The majority of those who had not declared their offshore assets had fallen into the trap of believing offshore assets don’t need to be declared.
It’s clear there are still plenty of misconceptions on the topic, so, we’ve debunked a few of the most common myths below.
OFFSHORE TAX MYTH #1
“Offshore assets don’t need to be declared in the UK, because they’re offshore”
You must declare your worldwide income if you are UK resident. If you think that your investments aren’t taxable, then let your tax adviser know about them and they can explain the reporting and taxing requirements for that particular investment or asset.
MYTH #2
“I wasn’t born in the UK, so I don’t need to declare my overseas income”
As a general rule, if you are UK resident then your worldwide income is taxable and should be declared in the UK. If, however, you were born overseas (non-domiciled in the UK) and do not expect to remain in the UK for the rest of your life, you can elect to claim the remittance basis and be taxed on your UK income only.
This is an active claim that must be made on your tax return. If you think this applies to you, ask us for some more information, because there are annual charges to make this election long term.
MYTH #3
“I’ve paid foreign tax already, so I don’t need to declare it again in the UK”
It’s common for foreign investments to suffer tax withholding in the country in which they are held, or for that country to require you to complete a tax return. However, this doesn’t mean that your UK tax obligations have been fulfilled. As a UK resident, you’ll still need to declare the income on your UK tax return. And you’ll get a credit for the foreign tax already paid.
MYTH #4
“I earned this money before I moved to the UK, it’s just sat growing in an investment account now. I haven’t brought it to the UK, so I don’t need to declare it”
If you’re a UK resident, the interest earned, or dividends received on investments are still taxable in the UK and should be declared on your UK tax return. If you’re UK resident but a non-domicile, you may be able to claim the remittance basis, but there could be a charge associated with this, so ask your tax adviser for more information.
MYTH #5
“It’s a foreign pension, it’s got nothing to do with the UK”
Whilst you might have earned your foreign pension whilst working abroad, when you retire back to the UK and become a UK resident again, your foreign pension is generally going to be taxable in the UK. There are some historical exceptions, so ask your tax adviser for more details.
MYTH #6
“I’ve declared my offshore income. I picked the best exchange rates so I paid the least tax possible”
HMRC have an approved list of exchange rates that should be used when converting currencies. You should use these rates instead of cherry-picking the best rate because you think it will save you tax. HMRC will query if the exchange rate used differs to what they are expecting.
MYTH #7
“My holiday home is rented and my expenses are greater than the income received, so I don’t need to report it in that country, or in the UK”
As a UK resident, you must declare your foreign rental income and expenditure, even if it makes a loss. If you have an overseas property, you may be taxable in the foreign country as well as in the UK, you may be able to claim tax relief through Double Tax Treaties. It’s also likely that the profit and loss account will need to be recalculated using UK tax and accountancy rules, meaning your taxable figure may differ to your overseas figure, for example, disallowing depreciation.
MYTH #8
“My accountant doesn’t need to know about this, it’s offshore so it doesn’t count”
You must always declare your worldwide income if you are UK resident. If you have any overseas assets, tell your tax adviser about them. They’ll be able to tell you whether you have any tax to pay and how the income should be reported.
ANY QUESTIONS? LET US KNOW
If you’re concerned that you’ve misinterpreted the rules on declaring offshore investments and want some peace of mind, get in touch.
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