Income tax with foreign income
Posted: Mon Jan 07, 2019 5:44 pm
I have a salary taxed at source but also declared interest earnings from NZ. This interest earned was largely offset by investing in a SIPP here. However, the tax office first calculated my income (taxable) with a basic rate applied to £33,500 and higher rate to 610 (as applied to my salary). However, they then added the amount I had paid into a SIPP, (offsetting foreign interest income), onto the basic tax rate increasing the 20% tax band to £39,313.
By doing this they have 'reduced the amount of income charged to higher rates of tax' but at the same time this reduces the amount of tax relief I am entitled to?
Surely the tax band of 11,501 to £33,500 should remain?
Can anyone help me with this please or is there some case law? The person at the tax department appears to use a form but cannot explain to me how or why they are coming up with this extended basic rate tax band?
By doing this they have 'reduced the amount of income charged to higher rates of tax' but at the same time this reduces the amount of tax relief I am entitled to?
Surely the tax band of 11,501 to £33,500 should remain?
Can anyone help me with this please or is there some case law? The person at the tax department appears to use a form but cannot explain to me how or why they are coming up with this extended basic rate tax band?