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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3619
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based)
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This is a follow up to previous questions. I have now received

Resolved Question:

This is a follow up to previous questions.
I have now received an assessment from the revenue for my capital gains tax on a property sold in Spain and I get conflicting advice from them about what is allowable to be offset against UK tax.The confusion is about witholding tax I put in box40 of the foreign tax credit relief form . As you correctly told me there is no relief for this as there is no agreement with Spain . However I seem to have been confused with the amount held by my Spanish solicitor to pay Spanish taxes (thinking this was a holding tax). I had to pay an additional amount in Spain which I put in box39 and this added to box 40 and the total put in box37.
The person who did the assessment for the revenue deleted the amount from box 40 and only allowed the amount in box 39 to be offset against UK tax.
I queried this with another person and they said I should not have split what I paid the solicitor and should have put the whole tax I paid in Spain in boxes 37 and 39 (as the amount left with the solicitor was not a witholding but a deposit for future tax liabilities).
What is the correct advice and how do you think I should proceed.?
Submitted: 10 months ago.
Category: UK Tax
Expert:  taxadvisor.uk replied 10 months ago.
Hello and welcome to the site. Thank you for your question.

It would appear both deductions are towards Capital Gains Tax payable to Spanish Tax Authorities and should be reported in boxes 37 of SA106. You only put the figure in Box 39 if you wish to calculate the foreign tax credit relief yourself.

This additional retention is not special withholding tax that has to be reported in Box 40..

You may find this article helpful ..
http://www.spanishpropertyinsight.com/tax-and-pensions/spanish-capital-gains-tax-retention-on-property-sales-by-non-residents/

You should write to HMRC and ask for the figures in boxes 37 and 39 to be amended to reflect total tax paid.

Please bear in mind if your UK CGT liability is less than the tax paid in Spain, then your foreign tax credit relief will be restricted to UK CGT payable.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 10 months ago.

Thanks for this .I shall write to the revenue and see how I get on.


Any suggestions on how I should word the letter.?


It is quite late so will pick up your reply tomorrow

Expert:  taxadvisor.uk replied 10 months ago.
Malcolm, thank you for your reply.

You should keep your letter simple and to the point.

Say something like .... I have been reviewing my records and wish to amend the figures reported on SA106. The revised figures are (state new figures).

You are kindly requested to amend my tax return and issue me with a revised SA302.

Many thanks.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 3619
Experience: FCCA - over 35 years experience as a qualified accountant (UK based)
taxadvisor.uk and other UK Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 10 months ago.

Hello Malcolm

I notice you have viewed my response to your supplementary question on suggested wordings of the letter to HMRC re amendments to figures submitted on your tax return (Customer Last Viewed on 10/11/2013 at 8:27 AM).

Just checking to see if you have any issues relating to your question that I may not have addressed. Please let me know if I can be of further assistance.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.

Customer: replied 10 months ago.

I did reply to you ,did you not receive it ?

Expert:  taxadvisor.uk replied 10 months ago.
Malcolm, the last note I got from you was..

"Thanks for this .I shall write to the revenue and see how I get on. Any suggestions on how I should word the letter.?

It is quite late so will pick up your reply tomorrow."

 

I responded to above note.

 

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.



Customer: replied 10 months ago.

Thanks I do not know why my follow up did not arrive. It pointed out that if you look at my previous questions answered by other advisors you will see that one said this was a withholding tax and the revenue was correct in saying it could not be claimed back . The reason I wrote to you was that when my wife received her tax assessment (she was joint owner in the property) the tax inspector allowed the full tax to be claimed ,so had realised the mistake .There appears to be a conflict of opinion about whether this is a retention or withholding by both advisors and the tax authorities. I shall follow your recommendations , just thought you would like to know why I wrote .Reply if you wish


Would you like me to rate you now ?


 

Expert:  taxadvisor.uk replied 10 months ago.
Malcolm, thank you for your reply.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get paid for it.
Customer: replied 10 months ago.

I will rate you now. Sorry I did not realise you would not be paid until I did this . I will follow your advice and I hope I can come back directly to you if the revenue does not agree

Expert:  taxadvisor.uk replied 10 months ago.

Malcolm, thank you for your reply.

Thank you for accepting my answer. Your reward of bonus is greatly appreciated.
You can always come back to me.

Best wishes.

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