This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Tax on trust payouts if not UK domiciled?

sparnz
Posts:1
Joined:Mon Jul 24, 2017 1:59 pm
Tax on trust payouts if not UK domiciled?

Postby sparnz » Tue Jul 25, 2017 8:29 am

I'm a UK resident for tax purposes but not UK domiciled (only ties to UK are my current job, I'm on a sponsored visa - no permanent home here and all family in New Zealand). I have a small amount of savings in NZ where the interest being earned is less than the £2000 I believe is the threshold? I am not bringing the interest into the UK but I have brought small amounts of my savings over - around £1600 since Feb last year, just for living expenses.

In addition to this, I've had two grandparents (both NZ domiciled) pass away and received a trust payout from each (around £4000-£5000 each time). Again, this money isn't being brought into the UK and was taxed in NZ. I know that NZ/UK have a DTA and that you don't pay tax on inheritance received overseas, but does this differ for a trust payment, even if it isn't coming in to the UK?

Because it's reasonably small amounts I can't really afford to seek professional guidance on this, but am confused on when the exemption applies for non-UK domiciled tax payers and am not sure whether I need to declare the trust payouts. The money I brought over from my savings is from previous NZ employment income that was taxed there, so I don't need to declare that correct?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Tax on trust payouts if not UK domiciled?

Postby maths » Wed Jul 26, 2017 11:07 pm

I'm a little unclear re references to "trust payouts"?

On death of your grandparents you say you received a "trust payout". Did you simply inherit under their wills OR have you received monies from trusts they set up (presumably in NZ)?

There is no double tax agreement between UK and NZ for inheritances.

For the UK resident but non-UK domiciled the less than £2,000 "test" means that no claim for remittance basis treatment is needed if for the tax year less than £2,000 of the individual's foreign income and gains remain unremitted.

The key is what is the nature of the £4k/5k?


Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”