Post by james on Nov 17, 2013 17:26:03 GMT
UK resident and UK domiciled people means most of those normally in the UK, who are require to use "arising" basis for their tax returns. Those who are not domiciled or not resident might instead be able to use remittance basis instead, so some of the tax treatment will differ and I thought that it might be more useful to have a different topic specific to the needs of that group.
As you probably know, if you receive any foreign interest you will be required to use the UK Self-Assessment tax return system. Even a couple of hundred Pounds of interest for 2011-12 was enough for HMRC to require this for me. No discretion at all.
If you have not yet registered for the 2012-13 tax year you should do so now, the deadline passed on 5 October. You probably won't face any penalty yet though. Either call HMRC on 0300 200 3310 or use the online form. It took about three weeks for me to receive a notice to complete a tax return after filling out the form with my estimated foreign interest. A letter a few days later gave me the taxpayer ID I needed to register for the HMRC online system. Then I had to use that to get a code to use Self-Assessment, two processes that added another couple of weeks of time.
For income tax you must report the income for those from each country separately. isePankur's current system does not provide a way to do this at the moment so lending to more than one country then getting a correct tax return could be difficult. At present I lend to only Estonia so I can be sure that I make a correct tax return and also because the other markets in Finland and Spain are relatively new, so risks are higher while isePankur learns. I use the isePankur cash flow report to get the numbers, you can click on each month to get a report for each day and that lets you split April correctly at the tax year end/start. If the total of foreign income is less than £2,000 you do not need to say yes to the tax return foreign income question, instead you can say no and report it in the untaxed UK income section and then make a note of the split between the two later in the tax return.
Being taxed on arising basis means you're liable for tax on the money when it is received even if you don't transfer it to the UK immediately. Strictly, that's required to be using the exchange rate on the day it is received. I phoned the SA helpline early in 2013 and they said that it was OK to pick any reasonable exchange rate, not the daily - or even actual time of day - rates that are required by a strict reading of the rules. HMRC publishes monthly exchange rates and a yearly average rate. For me the monthly rate produced a 2012/3 answer that is about 5% higher than the annual one. How are you handling the exchange rate calculations? Which data sources? Are you doing it daily for amounts of a couple of hundred Pounds or only for larger amounts?
It appears from UK P2P that the buying and selling of loans is a capital activity, potentially subject to Capital Gains Tax. I don't know of any really good isePankur reporting for this, though at least the total sold is available. Knowing how much you gained or lost in sale price and fees doesn't seem to be readily available. Nor does the price paid when buying a loan in some sort of consolidated report. Do you know of anything really useful for this?
Any tips to share?
As you probably know, if you receive any foreign interest you will be required to use the UK Self-Assessment tax return system. Even a couple of hundred Pounds of interest for 2011-12 was enough for HMRC to require this for me. No discretion at all.
If you have not yet registered for the 2012-13 tax year you should do so now, the deadline passed on 5 October. You probably won't face any penalty yet though. Either call HMRC on 0300 200 3310 or use the online form. It took about three weeks for me to receive a notice to complete a tax return after filling out the form with my estimated foreign interest. A letter a few days later gave me the taxpayer ID I needed to register for the HMRC online system. Then I had to use that to get a code to use Self-Assessment, two processes that added another couple of weeks of time.
For income tax you must report the income for those from each country separately. isePankur's current system does not provide a way to do this at the moment so lending to more than one country then getting a correct tax return could be difficult. At present I lend to only Estonia so I can be sure that I make a correct tax return and also because the other markets in Finland and Spain are relatively new, so risks are higher while isePankur learns. I use the isePankur cash flow report to get the numbers, you can click on each month to get a report for each day and that lets you split April correctly at the tax year end/start. If the total of foreign income is less than £2,000 you do not need to say yes to the tax return foreign income question, instead you can say no and report it in the untaxed UK income section and then make a note of the split between the two later in the tax return.
Being taxed on arising basis means you're liable for tax on the money when it is received even if you don't transfer it to the UK immediately. Strictly, that's required to be using the exchange rate on the day it is received. I phoned the SA helpline early in 2013 and they said that it was OK to pick any reasonable exchange rate, not the daily - or even actual time of day - rates that are required by a strict reading of the rules. HMRC publishes monthly exchange rates and a yearly average rate. For me the monthly rate produced a 2012/3 answer that is about 5% higher than the annual one. How are you handling the exchange rate calculations? Which data sources? Are you doing it daily for amounts of a couple of hundred Pounds or only for larger amounts?
It appears from UK P2P that the buying and selling of loans is a capital activity, potentially subject to Capital Gains Tax. I don't know of any really good isePankur reporting for this, though at least the total sold is available. Knowing how much you gained or lost in sale price and fees doesn't seem to be readily available. Nor does the price paid when buying a loan in some sort of consolidated report. Do you know of anything really useful for this?
Any tips to share?
