Tax Advice

[Sugar Ray]

My Dad recently confessed that he has not declared his taxes over the last 10 year. He retired 10 years ago moved to Ireland - but did not declare residency their either - he recently returned to England and is only spending 90 days a year. We are all concerned he has got into a mess, he is afraid to see an accountant in case he has to back date it all.

[buildersmate]

What's the question, then?

[kags]

Liability to UK tax will depend on 2 things - first, his residence for tax purposes. If your dad left the UK intending to move to Ireland on a permanent basis, and his return visits have not exceeded 90 days a year on average, then he will probably be deemed non-resident for tax purposes. Secondly, if he were indeed non-resident for tax purposes, he would only have a liability to UK tax on income arising here (such as a pension, or investment income).

I do not know the Eire tax laws, but would assume that once he arrived there to live, he would become liable to Irish tax on his worldwide income. There is a double taxation agreement between the 2 countries, which would ensure his UK income wasn't taxed twice.

So the issue is what sort of income we are talking about, is it income that has been taxed at source?

The UK tax authorities can routinely ask for tax for the previous 6 tax years, and can go back further if they suspect deliberate non-declaration. I don't know the position in Eire, but again, would expect something similar.

I would suggest he tries to sort this out now, otherwise the mess will get worse, and it may be, if the amounts are small, that it isn't as bad as he thinks.

[themas]

You say he recently returned to England. Do you mean he is now only spending 90 days a year in England, or only 90 days a year in Ireland?

If the former, then his tax problem appears to be entirely one to be sorted out in Ireland under their laws.

If the latter then - assuming he is now resident in England - he should declare himself for tax here. Whether our tax people will then contact the Irish ones I don't know. If they don't then maybe he could get away with it unless the Irish authorities find out somehow, but this means he always has the threat hanging over his head so it is best for him to contact them himself.

[Sugar Ray]

He moved to Ireland 10 years ago but because he was retired he just put his money into an off shore account and didn't declare residency their either, so didn't declare taxes, now he has returned to England and is only staying the max 90 days - the rest he spends in spain - they want to stay longer in the UK but he is worried that the taxman will backdate taxes 10 years ago -

[kags]

If he hasn't had a pension it doesn't sound as if he has had any source of income in the UK, so as long as he has been resident in Ireland and not exceeding the 90 day limit in the UK he should be ok for back years. However, if he does start to exceed the 90 days he will become resident in the UK again for tax purposes, and will become liable to tax on the offshore account. He may need to prove to Revenue and Customs that he has been living abroad.
Has he kept dates of his visits here?
He may well have been avoiding tax in Eire by not declaring the account, but if he left the country permanently, they won't catch him!