In this newsletter we will discuss options for you to cease your annual tax reporting requirements with HMRC, if you have no further need for self-assessment. We will also consider issues surrounding capital gains tax, where separate reporting requirements exist outside the annual self-assessment process.

Self-assessment requires a UTR number, a unique taxpayer reference code which, once open, necessitates a tax return to be filed annually until closed upon request.

Capital gains tax, as opposed to income tax, can, where disposal of UK property is involved, require a separate return be filed within 30 days of the gain being realised.

The process of filing a tax return generally commences with the application for self-assessment by completing an SA1 form online with HMRC. Once processed, you will receive your UTR number for use, as a reference, on an annual tax return.

This single annual tax return caters for a multitude of taxpayers in multiple situations with a large variety of issues to declare, be it employed, self-employed, company director, retired, resident or non-resident, of UK domicile or not. There is a myriad of issues that can be addressed in this one single template that can, understandably, prove daunting for many.

Examples of where a tax return should be filed via the self-assessment process include:

• PAYE income, in the tax year, greater than £100,000
• Self-employment income
• Rental income of more than £1,000 per year
• Income overseas of more than £300 per year

While it is our great pleasure to assist you with this ongoing annual requirement, there is however the opportunity to request HMRC to close your UTR number if you have no further need for self-assessment. Examples of where this may occur are:
Where there is no further rental income to declare, or
Where you become non-UK resident and have no taxable income to declare in the UK, such as the dormant company of which you are a director.

In each instance, we are available to advise further and to guide you, as your tax agent, where needed. Please do not hesitate to get in touch.

While the proceeds from gambling may be tax free in the UK, gains from trade in investments and crypto assets are a taxable event and should be included within the income and gains data declared within your self-assessment. While there is an annual tax-free allowance for income, there is also a separate tax-free allowance for capital gains. In several cases, gains below this tax-free allowance can be omitted from the tax return.
In terms of gains arising from the disposal of residential property, however, there is now a need for a separate CGT return to be filed with HMRC within 30 days of the sale taking place. Failure to meet this filing deadline will result in penalites.

This new reporting regime was introduced at the start of the 20/21 tax year for all disposals of UK residential properties, by both residents of the UK and those residing overseas. If resident in the UK and the property can be deemed to have always been your main residence, no taxable gain is deemed to arise and does not require reporting by way of a CGT return.

Of particular focus to HMRC is the gain arising from the disposal of a second home in the UK or a UK-let property, whether or not you lived in that property at some point previously. The rules apply not only to sales of a property but also to instances where the property is transferred to another person as a gift.

The tight 30-day deadline can create unnecessary pressure to address the new digital reporting system developed by HMRC and you are encouraged to plan in advance of the sale being completed. We would be happy to review your circumstances before the sale takes place and advise on your exposure to CGT in each instance.

Earlier in this newsletter we referred to your status as a UK resident taxpayer or otherwise, and to your status in the UK as a resident of non-UK domicile.
When expats often leave the UK, they often become non-UK resident if they can meet the non-residence criteria established by HMRC.

When expats come from overseas to live in the UK, they may be able to acquire the status of being UK resident but of non-UK domicile.

In both instances, there are opportunities to not be taxed on worldwide income on an arising basis.

It is important in each case to understand how you can maintain your position as a non-UK resident or benefit from your status as a UK resident of non-UK domicile.

If your plans include relocating to or from the UK, we would be happy, as your tax agent, to advise you further and to prepare for your new life as an expat.