I'm completing SA returns for myself and my wife. We are US citizens, UK residents, non-domiciled, using the remittance basis. All of our employment income is UK sourced and UK taxable, but we receive dividends in a US Vanguard account that remain in the US and are therefore not UK taxable. The dividends are under the £2000 threshold for each of us.
On the Additional Information pages, box 12 is called "Foreign earnings not taxable in the UK" and the
notes indicate:
You will need Helpsheet 211 Employment – residence and domicile issues to work out the part of your income and receipts which is not liable to UK Income Tax in the year to 5 April 2014 if:
•you are, will be or have been, non-resident or claiming split-year treatment, or
•you have been non-domiciled, or
•you are, or will be, non-domiciled and the remittance basis rules apply to some or all of your earnings (see Residence, remittance basis etc. notes ), or
•you received income in a foreign country that you could not bring to this country because of exchange controls or a shortage of foreign currency in that country.
Enter the amount not liable this year in box 12. However, you may have tax to pay on this amount (or part of it) in an earlier or later year or tax may be payable in another country on the same amount.
If you enter an amount in box 12, you are required in most circumstances to complete the Residence, remittance basis, etc. pages as well. However, if you are UK resident and not using the remittance basis, it is unlikely that you will need to complete these pages.
If you are completing box 12 on the basis that an amount is not taxable because it has not been remitted to the UK, then you must also complete box 28 on the Residence, remittance basis etc. pages. You should not complete box 29 on the Residence, remittance basis etc. pages if the amount you are entering in this box is more than £1,999.
My interpretation is that "foreign earnings" applies to foreign income from employment only, but the notes leave me thinking that they might have meant all types of foreign income to which the remittance basis applies. Any ideas which one it is?
