Tax Disputes & Investigations
ResidencyHM Revenue & Customs' (HMRC) Residency Teams are part of its Charity Assets and Residence (CAR Residency) Department. On this page:
The Non-Resident Individuals Compliance Team undertakes enquiries into the tax affairs of non-resident individuals. Any claim to non-UK residency by an individual must be dealt with by CAR (Residency). However, if such a claim is made during the course of an enquiry, it will be investigated by HMRC's Offshore Personal Tax Team (OPTT). [Top] Residence and ordinary residence are essentially questions of fact. Specific evidence needs to be carefully compiled and presented to properly support an individual's residence/ordinary residence status. Specialist advice in this area is invaluable. Domicile issues can be even more complex – so much so that HMRC will only launch investigations into an individual's domicile status it is immediately relevant to their UK tax liability. Domicile investigations often require a lot of personal information and supporting evidence about the individual's entire life, including their past, present and future intentions. In addition, we might also need to compile and examine information and documents relating to the life and decisions of a spouse, parent or even a grandparent. These issues are often complex and time-consuming and expert advice is essential. [Top] In ordinary residence or domicile disputes, CAR Residency is responsible for making any determinations involving Employment Income and Capital Gains Tax. These determinations must be issued before any assessments/amendments involving liabilities arising from ordinary residence or domicile. Appeals against such determinations must be properly made. [Top] CAR Residency is responsible for co-coordinating enquiries into a number of Double Taxation claims, including: -
That said, CAR Residency deals with all aspects surrounding applications by overseas lenders for loan interest to be paid either without deduction of tax or at the appropriate Tax Treaty rate. Enquiries are aimed at the company paying the loan and CAR Residency's main focus is ensuring that the interest is correctly treated in the tax return made by the UK paying company. This means that although the application is made by the overseas lender, CAR Residency's questions must relate to the UK company tax liability and comply with the normal CTSA enquiry rules. [Top] CAR Residency is responsible for dealing with the full range of tax potentially affecting non-resident trusts. Its primary focus is on the possible implications for UK resident settlors and/or beneficiaries and the interaction with the transfer of assets abroad legislation (see below). [Top] CAR (Trusts & Estates) has primary responsibility for the transfer of assets abroad legislation in Chapter 2, Part 13 ITA 2007 (previously Sections 739-746 ICTA 1988) and Sections 86 and 87, TCGA 1992. This legislation is designed to prevent the avoidance of Income Tax by individuals using overseas companies, trusts or other entities to reduce a UK tax liability. Investigations in this area are also conducted by HMRC's Specialist Investigations offices and High Net Worth Units. This legislation is extremely wide and potentially affects a large number of offshore tax planning arrangements ranging from single overseas companies, trust or partnerships to inter-connected companies or other foreign legal entities such as Anstalts, Establishments, Foundations and Stiftungs (which themselves are then often linked to non-resident trusts). The investigation cases on which we have advised typically involved one or more of the following issues: -
[Top] How can OneE TDI help? [Top] How can I contact OneE TDI? Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters. [Top] |
