Making Tax Digital ‚ HMRC letter to deferred businesses
Our June posting explained the technical issue with the current legislation which seemed to mean that offshore income gains were not included in the protections given to offshore trusts created before a person becomes deemed domiciled.
As reported in our November news item no statutory change will be made to the legislation with effect for 2017/18 or 2018/19.
Our November news item sets down in full the HMRC statement provided after the Budget. The end sentence was:
Going forward HMRC will continue to monitor this situation and engage with stakeholders‚
Another possible technical interpretation
We are aware that an interpretation of the current legislation which means that offshore income gains do come within the protections has been sent to HMRC. HMRC is currently considering this detailed technical analysis.
We understand that HMRC will respond in detail to the submission made. When we have the HMRC response we will publish full details both of the proposed technical analysis and the HMRC response.
Where this issue is in point for 2017/18 and tax returns have not been submitted members may wish to consider one of the three options set out below:
To delay filing the return until HMRC responds. However, while HMRC has indicated that it hopes to respond in detail, there is no guarantee that it will do so before the filing deadline
To file the return and consider amending it later once HMRC‚ s position is known or
To file the return with appropriate white-space disclosure of the technical position taken