.png)
.png)
IHT returns for Indian-domiciled late client.
A client of mine has just died. He was born in India to Indian parents but lived in the UK from his late teens until the end of his life. He had built up a considerable wealth around the world, including owning a property in India which he stayed in on his regular visits to meet members of his extended family. He always regarded himself as Indian and he planned to go back to India at the end of his life. I have on file an old DOM1 ruling from HMRC which agrees that he was domiciled in India.
To what extent can I rely on that ruling when preparing IHT returns on his death? The UK’s deemed domicile rules for IHT are over-ridden by the treaty with India so if he is domiciled as a matter of general law in India his non-UK assets are outside the UK IHT charge. How far do I have to go to satisfy myself about his domicile status? Does the old ruling give me a filing position? Clearly I will need to warn the executors of the risk of a challenge.
Any guidance will be most welcome.
Query 20,183 – Hopeful.
Residence status of traveller who went missing.
My client was a very successful business woman with business interests all over the world and an international investment portfolio. She had a taste for adventure and two years ago went on a solo trek in South America.
Unfortunately all contact with her has been lost and we have to assume that she has died – although there is a remote possibility that she has been kidnapped or started a new life for herself.
Her family are left in limbo and they are considering applying to the court for a certificate of presumption of death.
My question is how this fits into the statutory residence test. I know that there are rules which deal with the year of death (otherwise people who die on a long round the world cruise could be considered to be non-resident) but what happens if the date on the certificate is several years after the date on which she was last seen?
This might seem a macabre question but if she were non resident at or before the date of her death her tax position might be quite different.
Has anybody dealt with this before who can offer me some pointers?
Query 20,184 – Lost.
Where does tax liability lie?
I act for a large number of personal service companies which have operated on the basis that IR35 does not apply and have paid corporation tax and then extracted post-tax profits by means of a small salary and dividends. I’ve been reading the proposals for PAYE liability for non-compliance Off-payroll working (IR35) – calculation of PAYE liability in cases of non-compliance (tinyurl.com/342mweyz).
If my understanding is correct, it suggests that, at the moment, liability where the end user is large or medium or in the public sector lies with that end user rather than with the PSC. So what’s to stop all of my clients who are engaged by such end users from writing to HMRC and saying ‘on reflection I think that my contract was with the off payroll rules – please refund all of the tax I have paid and collect the PAYE from the end user’? That feels completely wrong to me, but does seem the logical consequence of the current position. Am I missing something? Clearly, big tax refunds would be attractive to my clients but I don’t want to get them into hot water with HMRC.
How are other people dealing with this situation?
Query 20,185 – Perplexed.
Desperately trying to comply.
My client is a trainee criminal barrister. He registered for VAT in early 2022, received a registration number, with a commencement date of 6 April 2022, wanting to submit a return to 31 March 2023 and annually thereafter. He has paid three instalments of VAT during 2022-23. I have finalised all the figures for his return, and yet his online VAT account is showing no returns as due. He paid the VAT I calculated is due: not a lot, but he wants to be compliant.
I have made endless attempts to sort matters out. Calls first to the general VAT helpline, and then in recent months, regular calls to the annual accounting team. A couple of months ago I was told that a migration fault had occurred on the move of his records, and that the matter would be passed to ‘technical’. The only subsequent successful call said that he would chase technical, and that there was nowhere I could write to in order to try and sort out the issue. Nearly all the calls result in pre-recorded messages saying all advisors are busy, asking me to call back later, and then cutting the call off. Only two of my 15 calls made to date succeeded in getting through to the helpline, both of them only after listening to piped music for the best part of an hour. The recorded message has told me countless times that my call is important to them!
For 2023-24 my client will continue to make instalments, aiming to comply. But it seems ‘criminal’ that a taxpayer and his agent who want to comply are unable to do so. It is easy to understand that less honest taxpayers would not try so hard. Does anyone have suggestions of how best to get HMRC to take whatever steps are needed so that my client can file his return?
Query 20,186 – Criminal.
Queries and replies
Send queries and replies to taxation@lexisnexis.co.uk. The views expressed are not necessarily our own and so they should be read with a critical spirit. Contributions may be identified by name or a pseudonym. For full T&Cs visit: tinyurl.com/RFguidelines.
