UK and U.S. brokers vs HMRC - residence discrepancy

[AndyN]

I used to live and pay taxes in the UK and bought a property there (after I left the UK) but now I live and am tax resident in an EU country. I gave my UK address to a UK (CFD) broker and a U.S. (futures) broker when I opened the accounts with them. I notified HMRC that I am no longer resident in the UK.

I understand that the UK broker will not report anything to HMRC and the U.S. broker will send the info to HMRC under FATCA.

In short - brokers think I am resident in the UK. HMRC thinks I am resident outside the UK.

Two questions:
1. Will HMRC ever find out that I have an account with the UK broker and any details about it like balance, profit, etc.?
2. Will HMRC pass on the information they get from the U.S. broker to tax authorities in the country where I currently live?

 

[Martin Everson]

Basically you want to hide these accounts from your current EU country. At same time you hope that HMRC does not do anything with data it gets or finds.

Hope is never a good plan sadly,

1. Will HMRC ever find out that I have an account with the UK broker and any details about it like balance, profit, etc.?

Yes.

2. Will HMRC pass on the information they get from the U.S. broker to tax authorities in the country where I currently live?

The discrepancy at some point will be flagged up by HMRC on their ssytem. They will send you an SA100 to complete as you may have had an oversight in failing to inform them you returned to UK due to UK address being present. At this point things may go bad for you as HMRC may communicate with the EU country given on your P85 and under the DTA determine where any tax owed should be paid. Your new country maybe happy to hear about this new data if they were not aware.

P.S You may want to rethink your actions.

 

[AndyN]

Yes.

How will the find out? Banks/brokers do not report anythiing about their clients' accounts if they are resident in the same country as the bank/broker, do they?

 

[Simon4466]

How will the find out? Banks/brokers do not report anythiing about their clients' accounts if they are resident in the same country as the bank/broker, do they?

Why wouldn't they?
Don't banks usually inform your tax authorities about things such as the balance etc. at the end of the year?

Not a UK resident but it would seem rather strange if they didn't.

 

[AndyN]

Of course they do not. There is no law that stipulates that. They only report accounts of non-residents under CRS

Perhaps I should get interested in how UK non-domiciled residence works - maybe that would be a good solution for me

 

[Martin Everson]

Banks/brokers do not report anythiing about their clients' accounts if they are resident in the same country as the bank/broker, do they?

They do and have done for years I am afraid.

https://www.litrg.org.uk/latest-news/news/171206-hmrc-are-set-use-bank-and-building-society-information-–-check-it-correct

Perhaps I should get interested in how UK non-domiciled residence works - maybe that would be a good solution for me

If your a UK passport holder then nearly impossible to be a non-dom. There are less than 800 people who hold a UK passport and can claim the status due to exceptional circumstances. If your not a UK domiciled individual then worth exploring but I can tell you now your wasting your time. Get familiar with how HMRC catches cheats below.

https://www.ft.com/content/0640f6ac-5ce9-11e7-9bc8-8055f264aa8b