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Remittance Basis Charge Nudge Letters

HMRC have continued their practice of issuing ‘nudge’ letters to encourage people to make sure their tax affairs are in order. The latest to be issued relates to the Remittance Basis Charge (RBC).

The RBC can be relevant for people who are non-UK domiciled, keep some of their income outside the UK and have been a UK resident for 7 out of the previous 9 tax years. A higher charge is applicable after being a UK resident for 12 out of the previous 14 tax years.

Deciding on the best way of reporting foreign income can be complex as it can have tax implications in the country where the income is earned as well as in the UK, and the optimum treatment can change between tax years as well as being dependent on income levels.

Domicile is also a complicated area, with many factors to be considered in order to determine your domicile position. Deemed domicile is a relatively new concept introduced into tax legislation, effective from 6 April 2017, which also needs to be taken into consideration. The introduction of these rules can mean that advice received in earlier years may no longer be correct.

If you receive one of these letters, it is essential that you seek appropriate advice as soon as possible as the charges can be substantial and if due, may also attract penalties.

However, if you have foreign income and would consider yourself non domiciled, we would suggest taking appropriate advice as soon as possible due to the areas of complexity, even if you have not received a letter from HMRC.

If you wish to discuss your own position, please contact our International Individuals Taxperts who are here to help.

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