Personal Tax

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UK Residency Tests

UK Residency Tests

If a UK resident receives foreign income then it is likely that the income will be taxed in the foreign country before being paid to that individual, and again when the individual declares the income to HMRC. The UK has treaty agreements with some overseas countries, in which UK residents can claim tax relief if their foreign income is subjected to tax twice.

Foster Caring
To foster a child is different than to adopt a child; the child will stay with the foster family for a duration of time as required, and while the foster family may be responsible for the child’s well-being while they are within their home, the legal rights of the child are still with the birth parents. There will often be a plan for the child’s future and for the child to return to its birth family but sometimes fostering can lead to adoption.
Tax on the Sale of Assets
When a sole trader or a partnership sell a business asset, such as machinery or a building, the calculation of tax to be paid on the profits is calculated via the Capital Gains Tax pages less than reliefs that the sale of the asset is entitled to. Limited Companies pay Corporation Tax on the profits of the sale of an asset alongside the profits of the business’ trading. Relief on the corporation tax payable can be claimed if there are losses being brought forward from previous accounting periods, or if the company’s production and transaction meet any requirements for specific relief.
Residential Landlords and the Rent a Room Scheme
If a homeowner rents out a room in their main home to a tenant or lodger, they will be required to complete a self-assessment tax return and may have to pay additional income tax on the rental profits made from the tenancy. If there are two partners renting out the room the income is shared between them equally, and each must prepare a tax return. Before agreeing a tenancy it is ideal for a homeowner to ask for references on the potential tenants and lodgers and to follow up on these, and to be fully aware of the guidelines on letting out a room in a main home.
Income Tax Relief
There are tax reliefs available to UK taxpayers if they meet certain criteria; a tax relief can reduce the amount of self-assessment tax an individual pays at the end of January and July, it could mean that HMRC are due to repay the individual a sum based on the relief, or that the tax is repaid to the individual in other ways such as their tax code being updated so that less tax is deducted from wages.


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