Take part in our new Family Business Survey and have your say! Click here
You don’t need to be a multinational company to find yourself affected by and needing advice on non UK laws and taxes. Something crops up for me virtually every week with some kind of international angle. From a holiday home just across the channel in France, to expats in Japan, mariners at sea, or a farmer’s son doing a stint in New Zealand we have a well travelled client base.
It is therefore increasingly important that we can access high quality advice via MSI Global Alliance to advise on non-UK issues. I’ve hijacked some well known books titles and their authors to illustrate the work MSI can help us with.
A Year in Provence: Mr and Mrs Mayle bought a property in France for their holidays and also let it when they are not there. Under the UK-France Double Tax treaty the rental income is taxable firstly in France and then in the UK.
Our MSI contact in France prepares their French tax returns to report the income there, and we then disclose the income and claim relief for the French tax on their returns here. In due course, when they come to sell they know that we can work with MSI to establish the correct capital gains tax position in both countries. We’ve also worked jointly on their Inheritance tax position and ensured they have suitable wills in both countries.
The Quiet American: Miss Green moved to the UK ten years ago, having been born and brought up in the USA. Given she had no income in the US she didn’t consider making reporting her income to the IRS. After all she was paying her taxes in the UK.
However, the USA is unusual in that liability is based on citizenship, not residence. Given Miss Green had kept her US citizenship, she needed to continue to make returns to the IRS. They can levy some very severe penalties for failing to report. She needed to go back a number of years to bring her IRS filings up to date. We were able to supply all the details of her income and assets required and our MSI contact was able to claim the benefits of a current IRS amnesty for US citizens abroad and bring her up to date.
A Tale of Two Cities: Not all countries look as favourably on trusts as we do and if a beneficiary goes to live or work abroad the trustees need to know if this causes an issue. France in particular has very strict reporting rules.
Mr Dickens had been a beneficiary of a UK trust for a number of years. When he moved to France we worked with MSI to understand the most tax efficient way of continuing to get funds out of the trust to him on both the French and UK side. We also need to report the existence of the trust to the French authorities annually – or risk substantial penalties. Each year we supply the information needed to our MSI contact so Mr Dickens knows the trust is compliant in both countries.
The Life of Pi: There are special tax rules for mariners and oil workers. When Mr Martel went to work on an oil rig outside UK waters we contacted the local MSI member to discuss the most tax efficient contract and establish what his local reporting responsibilities and costs might be.
Helen Thornley, Tax Consultant
If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletterSubscribe
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW