Surrender of Bond - UK HMRC

[Char]

I'm not sure if anyone will be able to help but am hoping someone can.

We needed some money to live on and we surrendered our Bond. We've just received a letter from the Bond people telling us we have a 'Chargeable Event' and information to put onto a UK self assessment tax return.

We pay all of our Tax in France and haven't had any dealing with HMRC since we moved over here about 20 years ago and wouldn't know how to go about filling out a self assessment form. I know we'll have to declare it in France and pay French tax on €3,000 but don't see why we should pay UK tax on it.

I was wondering if anyone had done something similar and could let me know how they went about dealing with it.

Thanks,
Char

[tagh]

Char,mthere are various groups on facebook which are very knowledgable and might be able to help.

[L Austin France]

If you declare joint revenue in the UK you have a £12,750 personal allowance each if you are a couple & declare joint revenue so you'll probably have to fill out a declaration but won't pay any tax. It'll be declarable in France for french taxation etc also.
There's a UK/french treaty which avoids double taxation.
We do a joint UK annual declaration for our UK rental income but pay NO tax etc in the UK.

[exile]

If the bond surrender is charged with UK Tax, by filling out a self assessment form you should get 100% returned to you by HMRC. Some companies will not charge UK tax if they are certain that you have no UK tax liabilities but many do charge UK tax on the basis that it makes their life an awful lot easier and puts the onus of proof of non-tax residency on the customer.

[Veem]

I declare income in the UK and also in France. I have always understood that HMRC have first dibs on taxing UK rental income, so I definitely pay tax on it there. In addition I have a government pension which I know is taxable in the UK and which is declared but not taxed in France (under the double taxation agreement).

Perhaps a bond is treated like an ISA which is tax free in the UK but not in France?

[elsie]

You have already been told your bond is a 'Chargeable Event' so any UK tax due will be taken but should eventually be refunded.

Until you have told HMRC you are permanently out of the UK and taxed in France they will request any tax due. Once you have completed a self assessment form you should each get a NT (nil tax) code. They might then ask you to complete a form for several years just to make sure they are aware of any income you receive in the UK and you are taxed outside the UK. Then they should assign NT permanently. That NT code does not necessarily mean you will not be charged tax at the time of a money withdrawal. However some time after the end of the UK tax year you should receive a UK tax statement and a refund of the tax paid. It is probably sensible for you both to complete individual forms now.

The self-assessment form is not difficult to complete (much easier than the French forms). It is just a series of questions with clear explanations and boxes to complete. The print version of the form can be downloaded from https://www.gov.uk/government/publicati ... turn-sa100

However you may need to set up an Inland Revenue account online or call the support centre https://www.gov.uk/government/organisat ... assessment as the form now requires a Unique Taxpayer Reference (UTR)

In France there may be both tax and social charges to pay.

[Char]

Thanks everyone - they haven't stopped tax because we had to kick up a stink and fill in a load of forms at the time of withdrawing the money, I'll have a look through the links and p'raps I'll have to phone them, deep joy.

[elsie]

I'm sure the bond people will have to report the transaction (and your address, passport number, etc) to the Inland Revenue so you will probably get chased.

[Char]

I'm sure the bond people will have to report the transaction (and your address, passport number, etc) to the Inland Revenue so you will probably get chased.

Yep, probably will, after all they collect the peanuts from people like us and let the rich stash their millions.

[niemeyjt]

Yep, probably will, after all they collect the peanuts from people like us and let the rich stash their millions.

Of course, remember:

We don't pay taxes. Only the little people pay taxes. - Leona Helmsley