source ceasing 2008 3 april


Postby gwm121 on Fri Jul 04, 2008 5:56 am

I am domicile abbroad uk resident.
Previously if feeder account closed the interest account was deemed capital when remitted to uk in next tax year for purposes of remitted money, and did not attract income tax.

At 3 april on an overseas account, I closed both feeder and interest account, and put the proceeds into a new account. Thus under the rules at that time as the tax year changed the new account having no feeder account, would be deemed capital, and could be remitted to uk without tax problem.

I am confused now as when the new tax year starts 5 april 2008, and this money remitted, is it under the new rules as interest, or have I done everything previously in the last tax year which makes it capital....( I am quite clear of course that in THIS 2008/9 tax year i cant close feeder accounts etc to source cease NOW) there is no point paying the massive ammount the new law requires to maintain my domicile.
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Postby AvocadoK on Sat Jul 05, 2008 2:10 pm

As the Finance Bill now stands, the 'ceased source' rule that you are referring to has been abolished. So anything remitted post 5/4/08 is taxable even if earned before.

But the HMRC notes to the Finance Bill do stress that the draft legislation is subject to change, so it would be unwise to base any decisions on the Bill as currently drafted. Having said that, I still fear the worst - i.e. that this bit of retrospective legislation will be passed as it is.
DB
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