Bringing money from abroad
Bringing money from abroad
Author
Discussion

Bat28

Original Poster:

95 posts

187 months

Sunday 28th April 2013
quotequote all
Looking for a bit of help here, as I'm struggling to find decent and understandable info on the subject .... confused

I am French, and have been working/living in the UK for the last 3 years. I have some money in the bank in France, and I would like to transfer some of it to help me with buying a house.
Does anyone know if I will have to pay any tax over here ?
I have already transfered small-ish sums before (less than 10k€) without any issue, but was wondering what happened with larger sums. I wouldn' be very happy paying tax on top of all the taxes I've already paid in France ! mad

Thanks !


ringram

14,702 posts

278 months

Sunday 28th April 2013
quotequote all
I do not believe so. If its already been taxed you should be fine.
Assuming you declared it on your UK tax form. There is a double taxation exception so you dont have to pay twice.
Might pay to check with your accountant.

gumshoe

824 posts

235 months

Sunday 28th April 2013
quotequote all
Transferring money and paying tax are two separate events. Even if you were non-dom and declaring on the remittance basis, it doesn't happen at the same time (but the tax liability does). That is to say, the transferring of money doesn't see any deductions (you were probably already aware of this).

You would be liable on any income/gains that you received in France while as a UK resident for tax purposes, but not those earned prior to becoming a tax resident. And France/UK have a double taxation treaty so any income/gain that was subject to being taxed in the UK would benefit from the relevant DTA (see http://www.hmrc.gov.uk/manuals/dtmanual/DT7250+.ht...

Eric Mc

125,770 posts

295 months

Sunday 28th April 2013
quotequote all
The general principle is that money that was accumulated overseas, through presumably legitimate means, can be brought into the UK with no fear of the capital sum being brought in suffering any additional UK tax.

Once it is safely lodged in a UK bank account or put into some other form of UK investment (such as stocks and shares or property), then any income generated by those investments (deposit interest, rental income, dividends etc) will be subject to UK taxation.


A Non UK Domicile (like you - as you were born in France) but UK Tax Resident (like you as you now live in the UK) IS subject to UK tax on their income.
If the income is generated in the UK, then they will definitely be subject to UK tax on that income from the date they start taking up residence in the UK.

If the income is generated overseas however, they will only be subject to UK tax on what is known as "The Remittance Basis". In other words they will pay UK tax on that overseas generated income ONLY if they bring that income into the UK.

So, if you had money on deposit in (say) France, you would only pay tax on interest generated by that money IF you transferred the interest into your UK bank account.

Bat28

Original Poster:

95 posts

187 months

Sunday 28th April 2013
quotequote all
And I thought that understanding French finance stuff was complicated ... laugh

Sooo ..... first of all, thanks for your answers !

I had that money on my French accounts before starting to work in the UK. Therefore, if I understand correctly, I will pay tax on the interest over the 3 years I spent in the UK.

Do I need to declare anything regarding the transfer ? Or will the taxman come after me ?


Eric Mc said:
So, if you had money on deposit in (say) France, you would only pay tax on interest generated by that money IF you transferred the interest into your UK bank account.
So if I don't take the whole sum on my account (leaving the interests) ... I wouldn't pay tax here ?

Eric Mc

125,770 posts

295 months

Sunday 28th April 2013
quotequote all
If you have been living in the UK for three continuous years, you would be looked on as resident in the UK for tax purposes, for at least one or two of those years.

If you had money in French deposit accounts giving you interest during that time, as long as you did not remit the interest into the UK you would not be liable to to UK tax on that interest.

If the French took French tax out of that interest at sourced, even if you were liable to UK tax on it, the UK tax autrhorities would give you a credit for the French tax you suffered and would only ask you to pay the additional UK tax, if any.

Bat28

Original Poster:

95 posts

187 months

Sunday 28th April 2013
quotequote all
Ok, thanks for that.

So I would need an accountant to help me declare what I'm bringing and where it's from ?

Eric Mc

125,770 posts

295 months

Sunday 28th April 2013
quotequote all
Not necessarily.

Can't you work out this yourself?

As I said at the start, the original lump sum amount you bring in would not be taxed in the UK itself - only new income generated by it, such as interest etc.

anonymous-user

84 months

Monday 29th April 2013
quotequote all
I've just done this to buy a house in the UK, no problem with the tax but you will need to provide proof of where the money came from to the bank receiving the mony, at least I did but mine came from outside the EU.

Bat28

Original Poster:

95 posts

187 months

Monday 29th April 2013
quotequote all
Eric Mc said:
Not necessarily.

Can't you work out this yourself?

As I said at the start, the original lump sum amount you bring in would not be taxed in the UK itself - only new income generated by it, such as interest etc.
I wouldn't even know where to start/what to fill in rolleyes

Eric Mc

125,770 posts

295 months

Monday 29th April 2013
quotequote all
There may not be any requirement to complete a Self Assessment tax return.

Are you currently a higher rate taxpayer in the UK?

If you are not, would you become one if a large lump sum of cash on deposit in the UK started generating income that moved you into the higher rate tax bracket?

For the current tax year (2013/14) an individual is liable to higher rate tax if their total gross income (before any tax is deducted at source) comes to £41,450.

Depending on your circumstances, if you are liable to pay some UK tax at the higher rate tax, then it may be advisable to complete a self assessment tax return.

Bat28

Original Poster:

95 posts

187 months

Monday 29th April 2013
quotequote all
I am not higher rate taxpayer, and I wouldn't be (I think) because the sum of money would directly (or nearly) be invested in a house therefore not generating income.
If it helps the discussion, the sum would be around 120k£

Eric Mc

125,770 posts

295 months

Tuesday 30th April 2013
quotequote all
As I said, the £120,000 can be brought into the UK with no UK tax being due on the £120,000.

There may be non-tax issues to sort out with banks, solicitors etc - such as compliance with Money Laundering Regulations etc.

Bat28

Original Poster:

95 posts

187 months

Tuesday 30th April 2013
quotequote all
Ok, thanks all for that (and especially Eric) ... I might come back with more questions though ... you never know laugh

LC23

1,315 posts

255 months

Sunday 5th May 2013
quotequote all
One other thing you need to be aware of is the mixed account rules. The problem you may have is that the funds you are bringing to the UK comprise of different sources sat in the one account. If this is the case you cannot "choose" which elements you are bringing to the UK. HMRC has set rules on this:

http://www.hmrc.gov.uk/manuals/rdrmmanual/RDRM3522...

I am assuming you have been claimng the remittance basis of taxation rather than going on the arising basis.