Mark Davies helps Lucy Warwick-Ching to answer a vexing question:-
I am a UK resident and pay tax on UK sources of income and gains. But because I’m not domiciled here I only pay tax on foreign income and gains if I bring those monies to the UK. I manage how I segregate my sources of income and gains and report any remittances, but I was surprised to receive a letter from HMRC telling me to disclose remittances “to avoid unnecessary contact and expense”. What should I do?
Mark Davies, at Mark Davies & Associates, a nondom specialist, says this is a blanket letter from the Revenue, which is being sent to everyone who is resident but not UK- domiciled who claims the remittance basis.
HMRC says its purpose is to educate the taxpayer and improve the number of incorrectly completed returns. It provides a list of examples of what the revenue considers to be remittances and encourages tax payers to admit any under-declarations. So if you have been careful to manage your finances and have followed the rules, having taken advice, there should be nothing to worry about. However, since 2008, the rules on the remittance basis have become considerably more complicated. Some of the Revenue’s examples are arguably wrong, or at the very least misleading, and it would be prudent to have your affairs reviewed by a tax adviser. You should be on notice that HMRC has its eye on “nondoms”, so your return may be under greater scrutiny in the future.