If you’re unsure how and when to file your self-assessment tax return forms and correctly calculate them, it can become quite complicated to get that number right. There are many exemptions, unique tax methods, and so on when calculating different incomes from other countries. That number can be drastically different if you try to calculate your tax based on the wrong rules on a remittance basis. The purpose of tax accountant UK is to make sure you’re not left confused or in the dark about any confusion over tax rules and details.
Remittance basis exemptions
If you’re currently living in the UK and have foreign income or gains, there are unique treatments to how this income or gains will be taxed in UK. If you’re living in the UK and are counted as a domicile in the UK, then your remittance basis does not apply, and 100% of your foreign income or gain, whether remitted or not, will be taxed. With that said, you’re only taxable on the remittance basis if the remittances are being remitted to the UK when you are not domiciled in the UK but only ordinary resident for tax purposes.
Who is deemed domiciled in the UK?
If you were born in the UK and still live here, you will be deemed as domiciled in the UK. You will also be deemed domicile here if you have been a resident of the UK for 75% of the last 20 tax years: and a resident of the UK for the current 2020 to 2021 tax year.
Remitting money to the UK
So, what does it mean for your money to be remitted to the UK? As a non-domiciled person, if your money is remitted to the UK, you should be concerned about calculating how much the UK tax rate is being applied to your foreign income.
If the money you’re receiving as foreign income is being brought to the UK, used in the UK, or received by someone else in the UK, under any form of benefit, it is taxable by regular UK income tax rules. That still applies whether the money is being spent for your own personal gain, spent for someone else’s benefit, used to pay for services within the UK, or used to pay off UK debts that you or someone you know might have.
It’s worth noting that if you remit the money to another country to buy an item and then bring it to the UK, it will not work as a loophole. That money was still used for benefit within the UK and should still be taxed as income.
Where to include foreign income in your self-assessment
When filing for your self-assessment tax return, you should ensure that everything is correctly filled in and that your details are accurate. When it comes to declaring your foreign income, there is a section dedicated to “foreign” for you to include any relevant and non-exempt information on your income received from other countries,