Complexities of divorce involving a US Citizen and a non-US Citizen

Divorce is a very stressful time but the complexities of the US tax rules when a non-US spouse is involved add an additional layer of complexity. Under the general US tax rules, when assets are transferred between spouses incident to a divorce there is no realisation of a gain or loss by the transferor-spouse. Instead, the transfer is treated as a gift. If the spouses are both US citizens, the case is straightforward and simple and no US Income tax or Gift ... Read More

HMRC shown red card in referees’ employment taxes case

English football referees have won a First Tier Tribunal case against HMRC’s attempt to classify them as employees rather than self-employed for the purposes of Pay As You Earn (PAYE) and National Insurance Contributions (NICs). The case highlights the complexity that can exist in determining a person’s employment or self-employment status. Whilst a select group of the top English football referees are employed full-time by PGMOL (the Professional Game Match Officials Limited) most referees in professional English football referee in their spare ... Read More

Sick as a Parrott

Former Rangers players and staff paid through an offshore trust have been told they have weeks to approach HMRC over a settlement or face an even larger tax liability. Last year, the Supreme Court upheld a Court of Session ruling that £47m paid to Rangers employees between 2001-2010 from an Employee Benefit Trust (EBT) was taxable employment income. Now beneficiaries of the EBT, many of whom were led to believe these were loans that would not have to be repaid, are being warned ... Read More

IRS urging early renewals of Individual Taxpayers Identification Numbers (ITIN)

Individual Taxpayer Identification numbers (ITIN) are designated to those who have tax filing and payment obligations under U.S. law but are not eligible for a security number. This includes those with US property, investments or income. The IRS have urged taxpayers to submit their ITIN renewal applications soon to avoid refund delays next year, predicting more than 2 million individual taxpayer identification numbers to expire at the end of 2018. Who needs to take action now? Only those taxpayers with an ITIN that ... Read More

HMRC’s Requirement to Correct Offshore Tax Irregularities

As previously highlighted, higher HMRC penalties take effect from 1 October this year in relation to ‘offshore’ tax matters. The new regime, known as ‘requirement to correct’ (RTC), imposes some very penal charges where UK tax is found to be underpaid in connection with a jurisdiction outside the UK. That said, to put this in context, where a tax liability is found to be payable in connection with a ‘non-UK’ matter, the default penalty under RTC is 200% of the tax due, and ... Read More

Streamlined Filing Compliance Procedures

The US is one of the few countries in the world to tax their citizens not on their US residency status but on their citizenship. This means that US citizens (and Green Card holders) living outside of the US are still required to file an annual US tax return with the IRS. There are many individuals residing outside of the US that have been unaware of this. Some may even be considered to be “Accidental Americans” where they acquired US citizenship at ... Read More

2017 UK–Belarus Double Taxation Convention enters into force

The 2017 UK–Belarus Double Taxation Convention, signed on 26 September 2017, entered into force on 27 July 2018. The Convention takes effect in the UK for: •taxes withheld at source for amounts paid or credited on or after 1 October 2018; •income tax and capital gains tax for any year of assessment beginning on or after 6 April 2019; and •corporation tax for any financial year beginning on or after 1 April 2019. It takes effect in Belarus for: •taxes withheld at source on income derived or ... Read More

Inheritance Tax- don’t leave it too late

Forewarned is Forearmed For many people, inheritance tax (IHT) planning is put firmly to the back of their mind and often left too late to leave time for any realistic planning opportunities. There are many basic planning opportunities which should be given due consideration now to help minimise your potential exposure to IHT and to ensure your loved ones receive as much of your hard-earned estate as possible. Do you have an IHT exposure? The IHT nil rate band for any individual is currently £325,000. ... Read More

Who has a requirement to correct?

It has been well publicised by ourselves, the press and HMRC that the ‘requirement to correct tax due on offshore assets’ ("RTC") needs to be considered and appropriate action taken as necessary before 30 September 2018. HMRC's guidance provides the following detail on when they suggest non-complicance will occur and RTC aaplies: "Offshore non-compliance occurs when there is tax owed to HMRC as a result of tax non-compliance and that non-compliance involves either an offshore matter or an offshore transfer. The tax non-compliance involves ... Read More

Discovery Assessment for Offshore Non-Compliance

The government has announced its plans to introduce new legislation which will more than double the retrospective time limit during which HMRC can investigate non-payment of income tax, capital gains tax and inheritance tax from offshore accounts where there is “non-deliberate offshore non-compliance”. Currently, a discovery assessment can be raised up to four years after the end of the tax year in question, which can be extended to six years if HMRC can demonstrate carelessness has been involved. The proposals ... Read More
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