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Readers' Forum
Replies to Queries — 2
Hong Konged
I act for two brothers, both now in their thirties. In 1980, on the death of their grandmother, they each inherited an eighth share of a property in Hong Kong. This property has been rented out in the intervening years; however, due to family disagreements no income has been received until recently. In 2003, three cheques totalling approximately £35,000 were received by each client.
Readers' Forum
Replies to Queries — 2
Hong Konged
I act for two brothers, both now in their thirties. In 1980, on the death of their grandmother, they each inherited an eighth share of a property in Hong Kong. This property has been rented out in the intervening years; however, due to family disagreements no income has been received until recently. In 2003, three cheques totalling approximately £35,000 were received by each client.
How should this amount be treated in the 2003-04 self-assessment return? To include it all as income of that year would appear to be inequitable.
For almost half of the period between 1980 and 2003 the annual income of approximately £2,000 would have been below the personal allowance with no resulting income tax liability. In 2003-04 both clients are higher rate taxpayers, whereas in earlier years this would not have been the case.
As an added complication, it would probably be possible to argue on the circumstances that each brother was non-UK domiciled whilst they were minors, given their father's domicile abroad.
Do readers have any suggestions on how to mitigate the current apparent high liability or any further practical suggestions with regards to these circumstances?
(Query T16,517)
