for a time length of approximately 91 Days or more in a year for 4 or more perpetual years; then he will be considered as a resident of the country of United Kingdom (U.K.), and will be entitled to pay taxes according to the rules and regulations of United Kingdom (U.K.) tax system.
Again, once Mr. Abid is a resident of the country of United Kingdom (U.K.), he is also entitled to pay Council Tax. His wife Mrs. Narida lives in a rented house with his mother whose age is around 70 Years. And so, when he becomes a United Kingdom (U.K.) resident, he may get an exemption on his Council Tax, based upon the fact that an aged person is also living with them. It is generally, better for large number of people to live together because depending on the size and type of people living in the property can be a powerful rationale for exemption like single person, or people living with children under the age of 18, or the disabled and pensioners are entitled to exemptions.
Next would be Inheritance Tax. Mr. Abid, 8 years in the past got a house as a wedding gift which was worth more than £ 310,000. Mr. Abid inherited it from his wife. So, he has to pay Inheritance Tax. He may have gotten so exemptions but due to the fact he isn’t a resident of the country of United Kingdom (U.K.), he is not going to get any kind of tax exemption.
Next is Capital Gains Tax. Mr. Abid will also have to pay Capital Gains Tax, once he sells the house which was given to him as a wedding present by his wife Mrs. Narida.
And now finally we come to Value Added Tax (V.A.T.). Value Added Tax (V.A.T.) is a system of taxation which is internationally practiced. So, no matter which country he/she is staying in they all have to pay Value Added Tax (V.A.T.) which also includes the country of United Kingdom (U.K.).
Case 2:
“Tax Non-Compliance” is mainly comprised of “Tax Evasion” and “Tax Avoidance”.
Generally, the distinction between “Tax Evasion” and “Tax Avoidance” is rather vague to say the least; however, there are some differentiations between them.
Here, in Case 2, at first Tanzila received property income of £ 5,000 but accidently entered the figure on her tax return as £ 500. While on the other hand, Mitu received property income of £ 7,000 and deliberately declared £ 5,000 on her tax return.
In both these cases, both of them have misled HMRC (Her Majesty's Revenue and Customs) by providing wrong information. So, they both committed the crime of “Tax Evasion”. However, there is a subtle difference between them.
In Tanzila’s case, while she did provide misleading information to the HMRC, she did not do so purposely; she entered the information wrong by accident. She didn’t mean to give the wrong information deliberately. And so, this will be treated as minor case of “Tax Evasion” and will be dealt out of count on the payment of penalties. Because, there is no need to cause too much trouble for such unintentional mistakes.
While on the other hand, Mitu deliberately provided HMRC with false information. So, unlike Tanzila’s case this cannot be treated as case of minor human error. Here, she intentionally trying to evade tax which is a serious crime of “Tax Evasion”, As such, Mitu will be subjected to criminal prosecutions, which might ultimately end up in her having to pay fines and/or imprisonment on conviction
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