The CIOT recently met with HMRC to discuss the issue of remittances of loan monies secured against collateral representing foreign income or gains.
HMRC’s published view is that if the full amount of loan monies secured against collateral representing foreign income or gains is brought into the UK, the full value of the collateral is deemed to have been remitted and taxed accordingly. Anything less than the full loan brought into the UK will be deemed as a remittance capped at the level of that amount actually remitted. The CIOT’s view is that the basis of an income tax charge should be capped at the level of monies actually remitted. Following the meeting, HMRC has agreed to review its position.
There was also discussion on whether remittances to the UK made in pursuance of a divorce settlement are chargeable, in light of submissions made by HMRC at the First-tier Tribunal in the case of Sehgal [2023] SFTD 212. HMRC had previously confirmed that payments made in the scenario outlined in a letter to the CIOT did not involve a taxable remittance. However, HMRC now says that whether or not property has been received or used in the UK as part of a particular transaction will depend on the specific facts of the case. HMRC agreed that further discussions may be required on this matter.
The CIOT recently met with HMRC to discuss the issue of remittances of loan monies secured against collateral representing foreign income or gains.
HMRC’s published view is that if the full amount of loan monies secured against collateral representing foreign income or gains is brought into the UK, the full value of the collateral is deemed to have been remitted and taxed accordingly. Anything less than the full loan brought into the UK will be deemed as a remittance capped at the level of that amount actually remitted. The CIOT’s view is that the basis of an income tax charge should be capped at the level of monies actually remitted. Following the meeting, HMRC has agreed to review its position.
There was also discussion on whether remittances to the UK made in pursuance of a divorce settlement are chargeable, in light of submissions made by HMRC at the First-tier Tribunal in the case of Sehgal [2023] SFTD 212. HMRC had previously confirmed that payments made in the scenario outlined in a letter to the CIOT did not involve a taxable remittance. However, HMRC now says that whether or not property has been received or used in the UK as part of a particular transaction will depend on the specific facts of the case. HMRC agreed that further discussions may be required on this matter.
