Put your questions to the Revenue

We’re all used to being subjected to uncomfortable questioning by the taxman, but here’s your chance to turn the tables.

To coincide with the expected announcement of a tax amnesty for offshore savers (an unprecedented move in the UK) HM Revenue & Customs has agreed to an exclusive interview with the Sunday Times.

And we want to know the sort of questions you want answered.

To submit a question....

... simply fill in the form below

We will present a selection of your queries to the people at the top.

... simply fill in the form below

We will present a selection of your queries to the people at the top.

Comments

[John Blackmore]

Life Bonds.

Why do the Inland Revenue allow applicants with no Insurable Interest
(e.g Grandfather and Grandchild) to take out a joint Life Bond ? The Objective here is simply to avoid paying higher rate tax by the Grandfather -- it has no commercial merit and is simply done to avoid tax. In my opinion this is taking the Mick out of the Revenue and Life Offices should be told to stop this cheating.

[Peter Brunton]

I cannot find out from the HMRC website whether it is necessary to fill in the CGT pages for self assessment if a capital gain has been made but the amount is below the threshold where additional tax is payable. Can you clarify?

[Dean (In London)]

Hi Taxman
.
I am UK Domicile and UK Resident, and have a number of overseas in Spain, US, France and Dubai.
I know that I have to pay tax on all overseas Rental income whilst I am here in the UK.
However if I was to gain a UAE "Residency Visa", and go and live in Dubai (not employed by a company over there, just living off the rent) whilst still remaining UK Domicile, would I still have to pay any kind of UK tax. Or will I just be subject to local taxes relevent to where my properties are located.???.
If I would only pay local taxes, from when would non-payment of UK tax start. Would I have to spend a full tax year out of the UK before it is effective ??.
I know that if I had UK property then it would take 3 or 5 years living abroard for Capital gains exemption in UK etc. However note that all my property assets are overseas and so whilst living abroard I wouldn't have any income generated from within the UK.

[David Landsburgh]

I was advised professionally to set up an offshore EBT (linked to my businesss) back in Feb. 2000. The Revenue is fully aware of it, but has not approved it. The cost to me of setting it up was significantand all I want to do is get it approved which my advisers tell me is the only available solution as it has been legally set up. Ijust want to do the right thing & have access to the trust. Can you please advise?

[Dean (In London)]

If I have paid income UK tax for a few years on Overseas assets and then become an Overseas Resident whilst retaining UK Domicile, and only have an income from my overseas assets, will I still have to pay UK taxes on income from my overseas assets or just the local taxes in the country where I live ???.

[Angela Wilson]

As a former senior civil servant my tax was deducted at source via PAYE. However, it now transpires that the DTI and DoH, the depts that I worked for, deducted tax at a lower rate than they should have for the years 2003-4 and 2004-5. These government depts were, so HMCR assures me, issued with the correct tax codes. As a consequence I have now been issued with a hefty bill (~£9,000)for the underpaid tax - moreover I have been charged interest and penalties on the owed monies. Why is it that I am being charged penalties for something that is not my fault? If my tax had been collected properly by the government depts concerned then the situation I am now in would never have arisen. Others need to be aware of the dangers of assuming government and other employers are deducting the correct amounts of tax from employees.

[Ron Carbutt]

I have a property in Spain which i let out in July and August. My rental income equates to approx the standing costs of running the property. Can costs offset income and if so which costs apply.

[Nigel Rawlings]

My mother is 81 years old and must complete a self assessment return. Part of my late father's pension is New Zealand based and so she must complete a foreign income form, which comprises 4 pages. She fills in one line.

I have 2 questions:
1/. Why can't there be a foreign income form on the Inland revenue web site so that I can submit her return for her over the Internet?
2/. Why does HMRC NEVER send my mother the correct forms for completion. For years we have asked them to do this and every time we are told that the computer "ought" to send her the correct forms based on her previous return - but it never does.

Old people can get very agitated and upset about small matters, particularly when they are to do with officialdom. Is there any chance that the Inland Revenue might become more user-friendly?

[CDT]

When does expensing mortgage interest for a home office lead to capital gains? I am unclear on what costs can genuinely be expensed for a home office without incurring a capital gains charge on the eventual sale of the home.

[Practical Partner]

Why on earth should my civil partner, who does not have UK domicile but has lived here for over 15 years, have to pay IHT (Inheritance Tax) on anything I leave her worth over £55k? If she's lived here long enough to be eligable for UK IHT, why not tax her at the new UK £300k limit?
And come to think of it, why is there IHT at all? It's an evil third-time tax - pay tax when you earn, pay tax on your pension, pay tax when you die!

[Ian Paterson]

With regards to IHT what possible justification can there be for effectively saying a non working wife does not contribute to her share of the value of a joint estate? We set up discretionary will trusts to reduce IHT and now, if my wife dies first, it is valueless. If Mr Brown so hates us supporting our children after death why doesn't he close off ALL means of mitigating IHT instead of toying with us so heartlessly. If he did so then at least we could vote him out on the issue at a suitable time.

[Michael (In London)]

When I was a final year student I paid nearly £200 in tax as I was given the tax code BR, though I never went over the tax free allowance for that year. Can I still claim this tax back as over 6 years have since passed?

[Mark Leonard]

Why won't the IR allow the costs I've paid as a result of employing accountants to calculate CGT charge on the sale of business assets?

[L.Penington]

I fill in my tax assessment form every year, adding all bank interest together, including a minute amount I get from a French Bank that services my home. It usually amounts to about ten euros a year!

How do I know you have registered that I've done this, or do I just keep all the statements in case I am asked?

[Jean Thomas]

I have foreign interest income arising in the US. As far as I am aware, I am not able to file electronically because of this, but has this now become possible and if not, why not?

[talkback]

Why only individuals? Why doesn't the inland revenue target companies. The organisation I work for, uses an offshore account as a pension's vehicle for those members temporarily seconded abroad, and who then return to the uk thus allowing payments into their GPP plan from it. Does the company pay tax on this account. No-one knows, but it certainly sounds like creative accounting to me.

[Lee Dribben]

Regarding capital gains tax, do I base length of ownership on exchange or completion dates? Assume regular contracts with no funny conditions.

[WTJ]

we own a house in france, and let it out over the summer months. each year, we just about cover our costs (maintenance, bills etc) and in some years we make a loss. we have never made a profit. are our expenses, incurred in france and therefore paid in euros, deductable?

[henry j mc geown]

is it true that if i am granted planning permission for a building site on land i own that the revenue can impose an arbitery valuation on it and impose tax on that ammount? if i decide to sell the site will i be taxed on the actual ammount i receive or this "assessed" ammount decided by the revenue?

[Hilary]

I took out a Newcastle Building Society property bond 4 and a half years ago, which tracks the Halifax house price index. This should produce a return of about 75% (over 5 years). It appears that I will be taxed on this as income in the year I receive it, thus putting me into the higher tax bracket, even though my normal income is small and the gain has acccrued over 5 years. This does not seem fair. Is there anything I can do about it?

[freda]

I am quite frankly fed up with the so called standard family getting all the tax breaks. I lived as a wife in such a family for 20 years and was physically abused for at least 10 of them.... I have now left and am in a totally loving and respecting relationship with someone of the same sex and as a result can offer an example to my children of what a truly mutually respective and loving relationship can offer. Why does the tax system continue to support an out of date ideal? - when there are plenty of new and differing positive family units that can be supported?

[Paul Mercer]

The recently announced changes to rates for empty buildings appear to directly contradict national regeneration policy. What is the incentive for a developer to construct speculative floorspace in areas of greatest need if he will be taxed via the rating system if the building remains unlet beyond 3 months?

[JJ]

Why can we not have access to the same rule books that the Tax office uses so that we can check that the rules are being applied correctly.

[david williams]

I have noticed a difference in attitude from my Tax Office over the last 2 years. Up to then, staff were helpful and "user friendly" but lately they do not respond to letters and seem more autocratic and dictatorial in phone conversations.
Is this a deliberate change in policy because of a mandate from above, or am I just unfortunate with my particular tax office on the south coast?

[M A Jackson-Roberts]

I am incensed at the lack of a phased higher personal tax allowance for women now aged 61-64, who are virtually forced to continue working to at least age 65 in any low-paying part-time job they can get after being required to retire from their primary employment at age 60.

[Richard Austin]

For the year 2005/06 I calculated on my self assessment tax return that IR owed me £8100 because I invested in various VCTs etc.
I have now telephoned them many times. They say they received my self-assessment tax return on 18/01/07, and still no-one has looked at it, but have given me no adequate explanation. This week I was told that the IR only guarantee to sort the tax by 31/01 if the form is received by 30/09, and that I shall receive interest on any money owed to me. This is small comfort because they pay only a low rate of interest, will probably want to tax it also, and the amount I might receive will not cover bank charges I may incur this month let alone make up for what I might have gained by investing the money recently. It seems to me that the IR is simply using this as a cheap loan.
They also told me that I am not the only one in this situation. Is that true?
What can I do to encourage them to sort this out? A £100 fine plus a proper rate of interest seems entirely appropriate!

[Kenneth RIPPON]

Am I liable for tax on Unit Trusts registered overseas if there is no income?

[Roderick Bird]

I am one person with one NI number but having worked for different pension providing companies now benefit from my "prudence". Why does the revenue deal with every income source from different tax offices? A job preservation scheme for tax men?

[Sue Ozcicek]

I have recently reached sixty and I intend to continue teaching for at least two more years, I am also receiving a state pension. How can I minimize the amount of tax I pay? The TPS will not allow me to pay an additional lump sum into my pension.

[Charles]

I have just sold my property in Spain, I have paid 5% on the capital amount and I am told I will have to wait up to 4 years for the CG tax to be assessed. Do I have to declare the sale to the UK tax office before I am told what the tax amount to pay is in Spain

[vannma]

CAn you tell me, on a scale of 1-10, how you would rate the Tax Office when it comes to collect money? If a taxpayer is required to make a payment, this must be done promptly or face a fine (or interest for missed/delayed payments). But when it comes to us needing a rebate, the same rules don't apply (i.e. takes for ever to get anything back and no interest paid on top).

[Garth]

Both myself and my daughter have full dual nationality -- British and American, by birth (It's a long story). We hold both British and American passports.
We are both currently domiciled in England and intend to remain so.
As the Father, if I were to purchase some rural land in America with my own money,but put the title of the land only in my daughters name, is this considered a UK "gift" to my daughter, please?
Assuming the land was eventually used to self-build a holiday cabin, would the increase in value of the property then cause a new UK "gift" to have occurred?
Where in the UK tax rules would I be able to locate the documentation that applies to this situation?
The land/cabin would never be rented out, or otherwise used to generate any income or tax-deductible expenses - it would simply be property where the family could go on holiday. I would pay the local property tax -- their equivalent of our council tax.
This is not an attempt to minimise or avoid UK inheritance tax. Whatever the UK tax situation was at my death would be handled at that time. Since the property would be solely in my daughters name, one does assume, however, there would not be any UK inheritance tax.
In view of our American citizenship, are we only going to be affected by American tax/property laws?
Thank You, Garth.

[Annette Corr]

I would like to know if children are subject to tax at the same level as adults, what if any tax let offs such as ISA they can have.

[Annette Corr]

Why do you have to visit a tax office to make an appointment, surely a phone call or email could be used to book an appointment

[Julia]

My partner and I are considering moving to Canada. If we keep our residence in the UK, then sell it in future when we are resident in Canada, will we have to pay capital gains tax? Is the only way to avoid capital gains tax to sell it immediately when we move out of the UK? Is this affected by whether or not we own a property in Canada - or whose name each property is under?

[Lin]

As an empty-nester,I rented out my previous home where I lived with my family for 11 years and have an interest only buy-to-let mortgage on that property. With the equity released by the buy-to-let mortgage, I bought a smaller property in a cheaper area to live in myself without the children. When I retire in 5 years time I would like to sell the house I have been living in since I left my original home 12 years ago and return to my former home with no mortgage. I was intending to "rent a room" when I return under the tax allowances to provide a small income in addition to my pension. However, I have been told that if I " rent a room" I will still have to pay CGT on that part of the house that I rent out under this scheme when I need to downsize and it is sold. To help me plan financially for the future, can you please advise me about my tax responsibilities in this situation?

[Trevor]

I believe I pass all the tests defining my domicile to be not in the UK. With this talk of amnesty relating to overseas income, do I need formally to get the Revenue's agreement with this? Or can I simply carry on as before, paying tax only on my UK-sourced income?

[Martin Redston]

Why does the IR have two different types of phone numbers? ie an 0845 number (5p per minute and more from a mobile phone) for all general questions, and an 01 (landline type) number for payments (probably about 1p per minute and free on many mobile package rates). Is it because a) they want to inhibit their 'customers' from complaining or asking penetrating questions b)they want to profit from our natural requirements for help and assistance whilst getting their own payments in quickly or c) they beleive the 'national rate' telephone charge myth?

Regards

Martin

[Martin Redston]

Please could the IR explain why they pursue interest payments for minor infringements of non payment by a due date when they are prepared to 'do deals' with the 'big boys'?

I was told that, despite having phoned them (at 5p per minute) to explain that my bank had made a mistake with one payment which would result in it being 2 days 'late', by law I could not be let off £4.64 'interest' at twice the typical building society savings rate. When I challenged this by asking whether they ever let anybody off at all, they mysteriously waived the charge!

[John Harman]

I am living in Western Australia and have a UK bank account. Can I reclaim income tax paid on the interest paid on the credit balances ?.

[Petra Mueller]

I am a German national but live and work since 5 years in Britain. I have never been asked to send in a tax declaration here, so I haven't. Now I have inherited a house and a sum of money in Germany. Do I have to pay inheritance tax in the UK (I do in Germany). And do I have to pay tax on the house and the interest from my account in Germany - or am I regarded as not domiciled in the UK?

[David Sugden]

We have 6 chidren, is it reasonable that the state will take 40% of our estate, leaving each of our children with just 10%, on inheritance.

[Matt]

Hi Taxman

Given the effort the Treasury has gone to, to ruin ASPs and ensure that a ridiculously high tax charge is levied on funds that are inherited by non-financial dependents, you must be gutted to see that a simple way around the new tax charges has already been published?

All one has to do is to draw the maximum income from an ASP (which will be taxed) and then use this to contribute to a pension on behalf of the desired non-financial dependent (the contributions will gain equal or even additional tax relief to the tax collected on the income from the ASP). No IHT will be due at all on such an arrangement.

Surely it would have been much better to have a reasonable tax charge for inherited ASP funds to save people the hassle of setting up arrangements like the one above?

Given the size of the tax charge I am sure anyone who might have wanted to pass on ASP funds on their death will now use such a lifetime contribution based scheme instead and the beneficiaries will end up better off than if your tax charge had never been introduced.

It just goes to show that when tax systems become unreasonable and unjust, they can actually result in _less_ tax being collected!

[Peter Hunter]

What are you doing about the £3Bn+ VAT fraud (as it's fraud you are probably just guessing at this figure) and wouldn't it be more cost effective to reduce this huge total than keep sqeezing the pips of the UK middle classes?

[Elizabeth Mirza]

I have just requested a tax rebate for 2006/2007 as I gave up work to look after my 3 small children (2 are under school age). I have just received a tax calculation for 2004/2005 stating I underpaid in that year. I worked for the local council and although they used the correct code, they deducted the wrong amount!!!! I am now liable for the underpayment. Apparently, I am responsible for the correct amount being deducted, according to the tax office.
Is there anything I can do? I have no job, no income and receive no benefits, we are soley reliant on my husbands wage.

[JJ]

Have any of the questions raised in April been put to the Tax authorities and have any answers been received?

[Charles Stewart]

I have lived in Switzerland since Jan 2005 and rented out my UK property In this period the house has increased in value. I now plan to sell my house. Am I liable to UK capital gains tax

[Nick Morgan]

You’ve got a page of questions as long as my arm, but no answers from HMRC. Why am I not surprised?
There is a lot wrong with our tax system and - while there is a lot of talk about reform - nobody seems to be doing anything about it. www.tax-hell.co.uk