Colombia Forum

fecherklyn
Joined 2015
Posts: 1382

3 years ago

A Tax clarification

3 years ago

I have just concluded some communications with HMRC (Her Majesty’s Customs and Excise Service, the UK Tax Authority) which concern me and might interest those forum members who still debate whether their incomes from outside Colombia are taxable in Colombia if they are deemed to be a “tax resident” in Colombia.

As you can see from an abbreviated version of this communication (below), the answer is “Yes, your incomes and taxable gains from sources outside Colombia ARE liable to taxation in Colombia IF you are a non-resident in the “source”country.

This is true for UK sourced incomes/gains and also true for France, the source of my pension incomes. Would it also be true for USA expats resident in Colombia…..I do not know.

The result can be costly. In my case, my UK and French incomes would be taxed in graduated steps from 20% if they were taxed in the source country, but they are taxed at 33% (in my case) in Colombia.

FROM HMRC UK 18/02/2021 - As you have stated you are a permanent non-resident in the UK, you are not required to report the Capital Gain (CG) disposal but it may need to be reported in the country of residence.

FROM FECHERKLYN TO HMRC UK - Dear Mrs. xxxxxxx,
I thank you for your email dated 18/02/2021 which confirms any capital gain I make as a non-resident in the UK from an investment in the UK is not required to be reported in the UK, but it must be reported in my country of residence (Colombia). This is now clear to me, but I have a further question I would like to ask:
Quite apart from the investment capital gain already discussed, I have invested some money in a UK entity by means of a Loan Note that will become payable shortly. So, my question is….”Should this interest income be reported in the UK, or can it be treated in the same manner as the capital gain…i.e. reported and taxed only in my country of residence? I have looked at the UK/Colombia Double Taxation Convention that entered into force on 13 December 2019, but I am afraid it was double-Dutch to me.

Dear Mr. Fecherklyn
In response to your enquiry, I can confirm that as you are permanently non-resident in the UK, the interest is taxable only in Colombia.
Yours sincerely
HMRC Officer

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