What our clients have to say
Our close working relationships are at the heart of our service
Statutory residence test and remittances
The client had confidence that they would be looked after quickly and comprehensively, meaning that their UK subsidiary could be fully operational without being held up by compliance matters.
Outcome
We reviewed the UK tax residence position of the client and their family and prepared a detailed report - explainingd how the statutory residence test worked, in respect of identifying whether an individual is a resident or a non-resident for tax purposes.
A crucial point was to advise the client on how to bring funds to the UK from overseas, in a tax-efficient manner, under the remittance basis. The remittance basis was advantageous to the individual due to substantial overseas earnings, which could be protected from incurring a UK tax liability, providing they were not brought to or used in the UK.
Our comprehensive report commented on how the remittance basis of taxation worked for non-domiciled individuals to assist them with structuring their affairs. This would enable them to bring funds to the UK in the most tax-efficient manner possible from a UK perspective.
We liaised with the client’s overseas advisers and family office throughout this process.
Solution
Our client wanted to understand their UK tax position now and moving forward. The client noted that they required access to ongoing sizeable funds, to maintain their usual lifestyle.
Issue
Over the past few years, a client who had always been a non-UK resident with non-UK domicile had begun spending more time there. For familial and personal reasons, this person wished to move to the UK for an extended period of time.
Pete Fairchild, Private Client Partner
We finally settled on the basis that our client’s reasonable excuse was valid, which meant their exposure to FTC penalties (between £62,000 and £84,000) was reduced to zero. We also successfully agreed appropriate suspension conditions with HMRC to reduce £15,000 of penalties charged under ‘normal’ rules to zero, on the basis the conditions are complied with.
Outcome
We submitted the disclosure on the basis our client had a reasonable excuse for the FTC. HMRC resisted however, we persevered, quoting relevant case law and reiterated the mitigating factors to HMRC
Solution
Issue
Our client had been living in the UK for several years and had retained an overseas rental property. The property was subsequently sold, and all international taxes were paid. They received a ‘nudge’ letter from HMRC stating they had information about their sources of overseas income, gains, or assets. The letter invited our client to review their tax affairs and make a disclosure if necessary.
Successful mitigation of penalties in relation to ‘offshore matters’
Tax Resolutions – Hayley Ives, Sean Wakeman, and Andrea Wong
Like many overseas nationals, our client did not appreciate that foreign sources of income and gains are reportable by UK residents, in the absence of a valid claim for the remittance basis. There was a large gain in the 2015/16 tax year due to the property sale. This was unfortunate because failure to correct (FTC) penalties of 150 - 200% of the tax would automatically apply - unless we could successfully prove that our client had a reasonable excuse for not correcting his affairs in advance of the requirement to correct (RTC) deadline on 30 September 2018.
We reviewed the background and quantified the amount of tax, interest, and penalty, which would be appropriate to bring our client’s affairs up to date.
Ongoing assistance with UK tax compliance
We reviewed the client’s circumstances using the Statutory Residence Test, in order to advise on the maximum number of days they could spend in the UK in the tax year of sale, without becoming resident and liable to UK tax on the capital gain arising.
Our Crowe Global partner firm advised that our client would not be chargeable to local tax on the capital gain, even if the client were to remain tax resident in that jurisdiction when the shares were sold.
Solution
The client required advice on the effect of a relocation to the UK on their tax residence status and the resulting tax consequences of the sale of their shares.
Issue
A member firm in the Crowe Global network introduced us to a client looking to return to the UK having lived overseas for many years. The client had previously invested in a UK start-up and the sale of the private company was imminent, with the client expecting to receive several million pounds in proceeds from the sale of their shares, plus a possible further ‘earn-out’ payment dependent on the future profitability of the company.
Mark Spalding, Director, Private Clients
Timing a return to the UK, to save on UK tax
By carefully following our advice and managing the number of days they spent in the UK, our client was able to remain not UK resident in the year of sale, saving UK capital gains tax of almost £3 million.
Outcome
Our client relocated to the UK the following year, and we have assisted them with preparing and filing their UK tax returns, including calculating and reporting on their UK tax return from the capital gain arising on the further ‘earn-out’ payment received in a later year.
