Sending Money To The Uk, And Not Paying Tax On It.

[Soutpeel]

... if however he deposited the money in a bank in the UK, he would be liable for tax on any interest earned on the money

Only if he is resident there.

When it comes to UK tax "residency" is everything. "Where you live" is meaningless.

No....if the OP holds a UK bank account as a UK citizen, he will be taxed on the interest....residency has nothing to do with it in this particular case...the income is "earned" in the UK

[JohnC]

Send to your solicitor to be placed in the company escrow account for property purchase.

[Darrel]

No....if the OP holds a UK bank account as a UK citizen, he will be taxed on the interest....residency has nothing to do with it in this particular case...the income is "earned" in the UK

You are wrong.

[TantraMantra]

Seaegle - I want to avoid as much as I can. Where's the issue? ...about my honesty; where do you get off with that remark. If it was not the fact that you made your very first no doubt sensible remark in that post I would again be telling you to relax and take a break as you don't need to be an arsehol_e troll all the time.

Anyway, I will call up the pay per second help line and ask them if its confidential. My accountant is a nice old duffer, but would not have a clue on tax treaties between Thailand and the UK. I just thought that with the <deleted> exchange rate there would be a lot of people returning and going through this hurdle.

Sorry that you had to deal with that nasty seaeagle guy. You're only asking advice not condemnation.

My bit is that if you deposit more than 10K in a UK bank they have to report it to HMRC. HMRC are not very helpful on the phone and they don't even use email. If you're non UK resident you may not be liable but I do know that HMRC will might want you to prove that Tax was paid in another country. I had to. Also if you were self employed previously then they might have been assessing you yearly while you were away. They did me. Opening a business is a tricky route. I'm not sure if it would apply but the VAT threshold is now only £77,000.

Your best source should be the accountant and if he doesn't know then ask him to recommend one who does or ask Qs for you. None of us want to pay taxes unnecessarily so the very best of luck in finding a solution.

[chiang mai]

No....if the OP holds a UK bank account as a UK citizen, he will be taxed on the interest....residency has nothing to do with it in this particular case...the income is "earned" in the UK

You are wrong.

Poster Soutpeel is correct, if the OP is a Brit he will be taxed on the interest he earns on his deposit, albeit he can have the interest paid gross if he claims he is non-resident. Tax will be due on any interest income above and beyond his personal allowance each year. If the OP were to depsoit the funds offshore UK he could recieve his interest gross and free of tax provided he is not UK resident.

But like others here I'm struggling to see where tax is due on any income he transfers back to the UK, unless he was previously UK resident and then went overseas for only a short period. That being the case HMRC could make a case to suggest he was always resident.

Finally, if the OP thinks that transfering money back in smaller amounts to various family members who will then aggregate it into his single account will escape the attention of HMRC et al he needs to think again. Banks and governement are not completely stupid and there are reportingrequirements in place to ensure that such tactics are closely scrutinised.

Edited April 27, 2012 by chiang mai

[Pseudolus]

But like others here I'm struggling to see where tax is due on any income he transfers back to the UK, unless he was previously UK resident and then went overseas for only a short period. That being the case HMRC could make a case to suggest he was always resident.

An Aussie friend of mine left Hong Kong recently, took his cash back with him, and had to pay a fortune to get it back in; as the Aussie system is fairly similar to the UK one I assumed that they would try to do me as well; a claw back on the tax I would have paid on that money in the UK if it had been earned there.

Just to summarise,

1) I am a UK national.

2) I left 5 years ago, but did not tell the UK government I had left

3) The money is mix of salaried earnings over the last year, and money taken out of the business I now own here (49% own that is) and will be classed either as directors loan or dividends

4) It is being used to buy a property in the UK

It seems that I am OK if I show I am non resident for tax purposes; Send to my lawyer to hold in escrow with proof of where it came from.

Thanks for all the advice; and assuming that everything goes to plan will report back.

[chiang mai]

But like others here I'm struggling to see where tax is due on any income he transfers back to the UK, unless he was previously UK resident and then went overseas for only a short period. That being the case HMRC could make a case to suggest he was always resident.

An Aussie friend of mine left Hong Kong recently, took his cash back with him, and had to pay a fortune to get it back in; as the Aussie system is fairly similar to the UK one I assumed that they would try to do me as well; a claw back on the tax I would have paid on that money in the UK if it had been earned there.

Just to summarise,

1) I am a UK national.

2) I left 5 years ago, but did not tell the UK government I had left

3) The money is mix of salaried earnings over the last year, and money taken out of the business I now own here (49% own that is) and will be classed either as directors loan or dividends

4) It is being used to buy a property in the UK

It seems that I am OK if I show I am non resident for tax purposes; Send to my lawyer to hold in escrow with proof of where it came from.

Thanks for all the advice; and assuming that everything goes to plan will report back.

Hmm, the bigger problem here might be that you didn't get non-resident status before you left, in theory HMRC could hit you with a series of penalties for not filing your tax returns for those years, assuming you haven't filed that is. HMRC does offer a service to returning expats where they will look at your tax affiars before you return to estimate any outstanding liabilities, if I were you I'd use it so that you know before hand and without running up huge legal bills.

[chiang mai]

A useful link below and an extract from it:

Returning to the UK within five years of leaving - 'temporary non-residents'

If you were a UK resident and moved abroad for less than five full tax years before becoming resident in the UK again, you will have been 'temporarily non-resident' for the period you were away. For more information about temporary non-residents and paying tax on the remittance basis follow the link below.

http://www.hmrc.gov....l/return-uk.htm

Edited April 28, 2012 by chiang mai

[Darrel]

Poster Soutpeel is correct, if the OP is a Brit he will be taxed on the interest he earns on his deposit, albeit he can have the interest paid gross if he claims he is non-resident. Tax will be due on any interest income above and beyond his personal allowance each year. If the OP were to depsoit the funds offshore UK he could recieve his interest gross and free of tax provided he is not UK resident.

You are also wrong.

http://www.hmrc.gov.uk/cnr/allow_nonres.htm

and:

"If you're not resident in the UK, you might still be liable to pay UK tax on any savings or investment income from UK sources. But the amount of tax you pay is limited to the amount deducted 'at source' before you receive the income - you don't need to complete a tax return to tell HM Revenue & Customs (HMRC) about this.

Most banks and building societies in the UK deduct UK tax from the interest before they pay it to you. If you're not ordinarily resident (you normally live outside the UK), you might be able to get your interest without tax deducted by giving form R105 'Application for a not ordinary resident saver to receive interest without tax taken off' to your bank or building society."

As for offshore banks in the CI or IOM, anyone who deposits money there will get the interest paid gross regardless of where they live but the interest paid will be reported to the tax authorities of their county of residence if this is in the EEC, and they may be subject to tax on it it. If they live outside the EEC no report is made but of course they may still be required to report it themselves.

[Naam]

Thanks - I am not selling a property here though. It's cash money I have saved up that needs to be put to a better use in the UK. I get the opinion it would be a straight capital gains tax or something like that.

since when are savings taxed? why do i get the feeling that this is one of your "pond-pipe-airconditioning" ideas?

dude, when I earn't the money i paid tax on it. Don't you pay income tax? The money did not end up in my savings account from a money tree, or from a kind fairy katoey waving his magic dong.

As for the aircon idea, it is sound, Pond pipe? A combustion engine. Also investigated an Aga to run aircon as well but could not be bothered to mention that as people on TV sit tend to troll anything that is not done the Thai way.

Dude, your various elaborations on taxes, savings and pond airconditioning systems clearly demonstrates that you possess a wealth of no bloody financial and technical knowledge. "sound" would be if you'd make an effort to understand some of the valid advice various posters have given in this thread.

[chiang mai]

Poster Soutpeel is correct, if the OP is a Brit he will be taxed on the interest he earns on his deposit, albeit he can have the interest paid gross if he claims he is non-resident. Tax will be due on any interest income above and beyond his personal allowance each year. If the OP were to depsoit the funds offshore UK he could recieve his interest gross and free of tax provided he is not UK resident.

You are also wrong.

http://www.hmrc.gov....llow_nonres.htm

and:

"If you're not resident in the UK, you might still be liable to pay UK tax on any savings or investment income from UK sources. But the amount of tax you pay is limited to the amount deducted 'at source' before you receive the income - you don't need to complete a tax return to tell HM Revenue & Customs (HMRC) about this.

Most banks and building societies in the UK deduct UK tax from the interest before they pay it to you. If you're not ordinarily resident (you normally live outside the UK), you might be able to get your interest without tax deducted by giving form R105 'Application for a not ordinary resident saver to receive interest without tax taken off' to your bank or building society."

As for offshore banks in the CI or IOM, anyone who deposits money there will get the interest paid gross regardless of where they live but the interest paid will be reported to the tax authorities of their county of residence if this is in the EEC, and they may be subject to tax on it it. If they live outside the EEC no report is made but of course they may still be required to report it themselves.

Sorry but I'm not wrong, the HMRC excerpt you quote exists but it's rarely available in practice and the option cannot be enforced under law. The R105 route is allowed by only a very small handful of UK financial institutions, if you have an account with an institution before you leave the UK some will allow you to convert to R105 afterwards, others will not. Try opening an account with a UK onshore building society for example whilst living in Thailand and in 99.9% of cases you will be refused since having a UK address is a requirement. Some of the major onshore banks willallow you to open an account and adopt R105, most will refer you to their offshore branches in the CI.

[Darrel]

Sorry but I'm not wrong, the HMRC excerpt you quote exists but it's rarely available in practice and the option cannot be enforced under law. The R105 route is allowed by only a very small handful of UK financial institutions, if you have an account with an institution before you leave the UK some will allow you to convert to R105 afterwards, others will not. Try opening an account with a UK onshore building society for example whilst living in Thailand and in 99.9% of cases you will be refused since having a UK address is a requirement. Some of the major onshore banks willallow you to open an account and adopt R105, most will refer you to their offshore branches in the CI.

HMRC is satisfied with my understanding of the rules and so am I. Your mileage may vary.

I know a little about opening accounts with onshore banks that accept R105 forms and have successfully opened new deposits up to the maximum UK deposit protection level with several different onshore UK institutions (banks not BSocs) since late last year, giving my Thai address for the application and also on the R105. Interest on all of it is paid gross. At the time of opening all of these accounts were at the top of their respective league table for rates (5-year, 4-year and 2-year), and most of them are still at or near the top even though rates have decreased a little since then.

There was also the other option (sadly defunct since April this year) of qualifying time deposits of under 5 years duration and over GBP50K, which were also automatically paid gross, regardless of residence and regardless of the institution. Previously I opened a few of those also, some of which giving a UK address to get around the astounding short-sightedness of UK BSocs that you rightly mention.

[chiang mai]

Sorry but I'm not wrong, the HMRC excerpt you quote exists but it's rarely available in practice and the option cannot be enforced under law. The R105 route is allowed by only a very small handful of UK financial institutions, if you have an account with an institution before you leave the UK some will allow you to convert to R105 afterwards, others will not. Try opening an account with a UK onshore building society for example whilst living in Thailand and in 99.9% of cases you will be refused since having a UK address is a requirement. Some of the major onshore banks willallow you to open an account and adopt R105, most will refer you to their offshore branches in the CI.

HMRC is satisfied with my understanding of the rules and so am I. Your mileage may vary.

I know a little about opening accounts with onshore banks that accept R105 forms and have successfully opened new deposits up to the maximum UK deposit protection level with several different onshore UK institutions (banks not BSocs) since late last year, giving my Thai address for the application and also on the R105. Interest on all of it is paid gross. At the time of opening all of these accounts were at the top of their respective league table for rates (5-year, 4-year and 2-year), and most of them are still at or near the top even though rates have decreased a little since then.

There was also the other option (sadly defunct since April this year) of qualifying time deposits of under 5 years duration and over GBP50K, which were also automatically paid gross, regardless of residence and regardless of the institution. Previously I opened a few of those also, some of which giving a UK address to get around the astounding short-sightedness of UK BSocs that you rightly mention.

Ok, so we agree BS's are non-starters in this respect so which banks were you sucessful with? I know HSBC is very co-operative as far as R105 is concerned so that's not a problem, Santandar however always pushes people towards their offshore facility as does Lloyds/RBS. At last attempt two years ago Barclays also pushed for offshore and was not happy with R105 as long as their offshore option remained an alternative. One BS that is worth mentioning here is Nationwide Int in the IOM, whilst offshore it is covered by the IOM depsoit protection scheme and is a truly excellent BS to deal with.

[PattayaParent]

^all banks and building societies in IOM are covered by the deposit protection scheme, not just Nationwide.

[PattayaParent]

But like others here I'm struggling to see where tax is due on any income he transfers back to the UK, unless he was previously UK resident and then went overseas for only a short period. That being the case HMRC could make a case to suggest he was always resident.

An Aussie friend of mine left Hong Kong recently, took his cash back with him, and had to pay a fortune to get it back in; as the Aussie system is fairly similar to the UK one I assumed that they would try to do me as well; a claw back on the tax I would have paid on that money in the UK if it had been earned there.

It isn't, Aussies are taxed on worldwide income and if they pay tax in another country that is less than the tax they would have to pay in Aus then they have to pay the difference to the Aussie tax man.

A mate of mine who worked in Thailand last year was caught out by that.

Edited April 28, 2012 by PattayaParent

[chiang mai]

^all banks and building societies in IOM are covered by the deposit protection scheme, not just Nationwide.

I didn't imply it was just Nationwide that was covered by the scheme.

Edited April 28, 2012 by chiang mai

[chiang mai]

I don't want to belabour this point but I do think it's very important that everyone is clear about UK taxation rules of UK expats when it comes to things such as savings accounts and time depsoits et al. The general rule is that all UK income arising from these accounts in the UK is taxable within the albeit the personal exemption can be utilised. Income from those accounts can however be recieved gross if the bank, not a building society, accepts the HMRC R105 approach, currently that is very much the exception and is limited to a few second teir banks, some investment and insurance companies, HSBC and some foriegn banks that are based in the UK.

[12DrinkMore]

It isn't, Aussies are taxed on worldwide income and if they pay tax in another country that is less than the tax they would have to pay in Aus then they have to pay the difference to the Aussie tax man.

A mate of mine who worked in Thailand last year was caught out by that.

Ouch!

Presumably if they pay more than the taxes due in Aussieland, then the Aussie taxman refunds the difference?

Edited April 28, 2012 by 12DrinkMore

[topt]

Sorry but I'm not wrong, the HMRC excerpt you quote exists but it's rarely available in practice and the option cannot be enforced under law. The R105 route is allowed by only a very small handful of UK financial institutions, if you have an account with an institution before you leave the UK some will allow you to convert to R105 afterwards, others will not. Try opening an account with a UK onshore building society for example whilst living in Thailand and in 99.9% of cases you will be refused since having a UK address is a requirement. Some of the major onshore banks willallow you to open an account and adopt R105, most will refer you to their offshore branches in the CI.

HMRC is satisfied with my understanding of the rules and so am I. Your mileage may vary.

I know a little about opening accounts with onshore banks that accept R105 forms and have successfully opened new deposits up to the maximum UK deposit protection level with several different onshore UK institutions (banks not BSocs) since late last year, giving my Thai address for the application and also on the R105. Interest on all of it is paid gross. At the time of opening all of these accounts were at the top of their respective league table for rates (5-year, 4-year and 2-year), and most of them are still at or near the top even though rates have decreased a little since then.

There was also the other option (sadly defunct since April this year) of qualifying time deposits of under 5 years duration and over GBP50K, which were also automatically paid gross, regardless of residence and regardless of the institution. Previously I opened a few of those also, some of which giving a UK address to get around the astounding short-sightedness of UK BSocs that you rightly mention.

Darrel is it possible you could let us know (or PM it) which banks you are referring to? As chiang mai mentions most ask you to confirm you are UK resident and I have been fudging this issue when I have had to.

[PattayaParent]

^Just open an account offshore IOM and you don't have to mess around with bogus addresses and tax.

[rotary]

Hand carry and make several trips.........figure out travel cost vs tax cost.

Not sure on the UK but most countries you can carry whatever amount of cash if you decide to declare it.

[Soutpeel]

But like others here I'm struggling to see where tax is due on any income he transfers back to the UK, unless he was previously UK resident and then went overseas for only a short period. That being the case HMRC could make a case to suggest he was always resident.

An Aussie friend of mine left Hong Kong recently, took his cash back with him, and had to pay a fortune to get it back in; as the Aussie system is fairly similar to the UK one I assumed that they would try to do me as well; a claw back on the tax I would have paid on that money in the UK if it had been earned there.

It isn't, Aussies are taxed on worldwide income and if they pay tax in another country that is less than the tax they would have to pay in Aus then they have to pay the difference to the Aussie tax man.

A mate of mine who worked in Thailand last year was caught out by that.

Correct, in fact some of the Aussie's I know are going back to work back in Aussie as there are few "benefits" for them working overseas now...they are getting screwed at every turn, further getting declared non-resident is also quite difficult

[Darrel]

^Just open an account offshore IOM and you don't have to mess around with bogus addresses and tax.

Lower deposit protection and lower interest rates make this undesirable.

[PattayaParent]

^Just open an account offshore IOM and you don't have to mess around with bogus addresses and tax.

Lower deposit protection and lower interest rates make this undesirable.

True.

It's a pain having to administer several accounts due to deposit protection but I earn more in interest than the personal tax allowance so having the accounts in the IOM means I save on tax what I lose in interest.

Also as IHT is an important consideration for me I don't want to be giving bogus Uk adresses that would trip me up in the future.

Also I don't have the problems reported on here several times that UK banks will not let you send money overseas by internet banking.

[DGS1244]

From what I understand, and I have transfered money between UK and Thailand a number of times both ways, is that any amount over 20,000 USD has to be 'approved' by Bank of Thiland and Bank of England and proof shown as to where it came from. As far as I have experienced there would be no tax liability if you have already paid tax on it and capital gains tax does not apply anyway. Hope that helps.

[bkk_mike]

If you've been out of the country 5 years, you're exempt from capital gains tax on stuff you sell before you move back. I know because I'm looking at selling my old flat in London later this year and was pleasantly surprised that I wouldn't have CGT to pay.

But the non-resident rules for tax changed recently - with the new rules being a lot more specific. (i.e. if you send your kids to school in the UK, they need to spend less than 60 days of their holidays in the UK, etc. or you need to spend less days in the UK...)

You should probably confirm you're non-resident under the new rules. (They are significantly altered - i.e. 2009/2010 I was definitely non-resident under the old rules, but I'd literally need to count the days I spent in the London office now as well as the days I spent in the UK from my passport to be certain under the new rules as I spent some days at work, and apparently working in the UK (for the company that employs me in HK) rapidly reduces the number of days I could be in the UK and still be non-resident for tax..

The new rules do tidy up things like how many days you can be in the UK and still keep a property for your use while being non-resident for tax, etc, so they're a lot more black and white than the old rules in that regard.