Yet Another Uk Tax.

[yogi100]

This is a new one on me.



My pal lives in Pattaya and is reasonably financially secure. He decided
to send his three adult offspring back in the UK 10,000 GBPs a piece.
He has his state pension and a local authority pension and some savings.



He sent the three cheques off and soon received a phone call from his
daughter who had taken her cheque into her bank to deposit it. She was
informed that deposits over 3,000 pounds were now subject to a tax. This
is possibly because the sum was a gift, she did not clarify the reason
nor did she tarry to find out how much the tax would be, she simply
walked out with the cheque in disgust.



She is sending the cheque back to her father as she resents contributing to the legions of freeloaders now resident in the UK.



Any Brits heard of this latest rip off

[Maestro]

I suspect that your friend's daughter may have been given wrong information by the bank's teller or she may have misunderstood or misinterpreted the information she received. Unless and until we have a quote of the text of a corresponding rule with a citation of the source I suggest that readers take your post as an uncorroborated rumour.

Sent from my Android tablet

[Rajab Al Zarahni]

I agree with Maestro but a simple way of resolving the problem would be to ask your friend to provide his daughter with 4 cheques of £2500 each and submit them one at a time for clearance.

[yogi100]

I suspect that your friend's daughter may have been given wrong information by the bank's teller or she may have misunderstood or misinterpreted the information she received. Unless and until we have a quote of the text of a corresponding rule with a citation of the source I suggest that readers take your post as an uncorroborated rumour.

Sent from my Android tablet

Word has it, that it is a new ploy recently introduced to thwart those who may wish to avoid Inheritance Tax.

The source was fellow who had no reason to fabricate a story, start a rumour and the information came over the counter in the lady in question's bank.

[Maestro]

I can't figure out the reason for sending a cheque from Thailand to the UK. The UK bank's fee for clearing the cheque must be enormous. Wouldn't a bank transfer be more convenient and more economical? Some banks in the UK may still work in a very old-fashioned way, but I made direct transfers to a UK bank account already in 1970.

[mad mary]

"She is sending the cheque back to her father as she resents contributing to the legions of fr"eeloaders now resident in the UK."

I think this was the main point /snipe at the UK.

[Maestro]

yogi100, on 04 Apr 2013 - 23:23, said:

The source was fellow who had no reason to fabricate a story, start a rumour and the information came over the counter in the lady in question's bank.

It still does not change the fact that this is third-hand hearsay and as you said yourself "...she did not clarify the reason nor did she tarry to find out how much the tax would be...". A web search has given me no indication of such tax. Aside from that, I never questioned the integrity of your friend but alluded to the possibility that the bank employee may have given wrong information or that your friend's daughter misinterpreted the information she was given. Let's just wait and see what transpires. If there is indeed such new tax it certainly won't take long for it to hit the media.

[sustento]

I think there are a number of crossed wires here. Until someone actually comes up with an official name for this tax it's no more than a rumour. If the cheque sender still has a UK bank account and UK cheque book there would be no bank charges to be paid.

[Maestro]

That gifts received over a certain value are subject to inheritance tax when the donor dies within a certain period after giving the gift is nothing new, ie not "yet another UK tax"

Annual exemption

You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from Inheritance Tax when you die. You can carry forward any unused part of the £3,000 exemption to the following year, but if you don't use it in that year, the carried-over exemption expires.

In addition to the annual exemption there are other exemptions for certain types of gifts. These are explained below.

Read more: http://www.money.co.uk/article/1007483-gifting-money-to-your-children-faqs.htm#ixzz2PXJ6wofD

Source: http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

Gifting Money to Your Children: FAQs

by Martin from money.co.uk

Helping your children out financially is something every parent would like to do, but you need to be careful if you dont want them to face a hefty bill from the taxman. Heres what you need to know.

Gifting money to your children may seem like a great way to help them financially, but while theres no limit to how much you can give there are tax implication to consider.

Give them the cash at the wrong time or in the wrong way and they could end up being chased by the tax man at a later date.

...

Inheritance tax sees the government take a slice of your estate before its passed on to your loved ones; it is also applied to any monetary gifts you give in the 7 years preceding your death.

Read more: http://www.money.co.uk/article/1007483-gifting-money-to-your-children-faqs.htm#ixzz2PXJ6wofD

[yogi100]

I can't figure out the reason for sending a cheque from Thailand to the UK. The UK bank's fee for clearing the cheque must be enormous. Wouldn't a bank transfer be more convenient and more economical? Some banks in the UK may still work in a very old-fashioned way, but I made direct transfers to a UK bank account already in 1970.

It was an HSBC Bank cheque from my pal's British HSBC account.

Edited April 4, 2013 by yogi100

[black fox]

i happen to personally know the guy who sent the cheques and his integrity is beyond question.

[chiang mai]

For your post to ring true it would mean that anyone in the UK who wrote a cheque for more than £3k would be taxed, if that were the case, (which it is not), there would have been much news about it in the UK media (which there hsan't been) and the tax would appear in the HSBC UK term of business and charges (which it doesn't). And BTW I just sent my Solcitor a cheque because I'm buying an apartment, that HSBC cheque was paid in full and no deductions were made!

[Psych01]

Having worked in the banking system in the UK, if we were presented with a cheque from a bank account outside the UK it would be sent to the international clearing house or to the actual bank in whichever country, clearing time is usually around 6 weeks. However, if it is a UK bank cheque it will usually take between 5-10 working days, there is no charge for this in the UK, unless it is a business account.

The teller/cashier could be referring to Capital Gains Tax, link here: http://www.hmrc.gov.uk/cgt/intro/working-basics.htm#5, as your friend has gifted the money to a family member.

[chiang mai]

Bank tellers collect taxes for HMRC on Capital Gains!

[Psych01]

Bank tellers collect taxes for HMRC on Capital Gains!

NO! But they are obliged to notify you of your (possible) tax obligations.

[chris2004]

Bank tellers collect taxes for HMRC on Capital Gains!

NO! But they are obliged to notify you of your (possible) tax obligations.

How could the teller possibly know that the cheque was written by her father, who might be old, and who might die and be subject to inheritance tax? Surely to them it's just another cheque to be deposited. Sounds bizarre. The tax only becomes due when the father dies anyway.

[poohy]

Having worked in the banking system in the UK, if we were presented with a cheque from a bank account outside the UK it would be sent to the international clearing house or to the actual bank in whichever country, clearing time is usually around 6 weeks. However, if it is a UK bank cheque it will usually take between 5-10 working days, there is no charge for this in the UK, unless it is a business account.

The teller/cashier could be referring to Capital Gains Tax, link here: http://www.hmrc.gov.uk/cgt/intro/working-basics.htm#5, as your friend has gifted the money to a family member.

I also used to work in the banking industry , which UK bank takes 10 days to clear a UK cheque? funds are available after 3 working /banking days i.e pay in Monday draw out Thursday admittedly your bank should check for the paying banks late returns.. but after midday cash is yours

[m3dave]

its more probably something to do with laundering drug money, once you get to a certain limit of selling on ebay you have to fill in an online form stating where the money in your paypal account has come from, and why your not SUPPOSED to take bundles of cash out of the uk,i forget the limit .

[chiang mai]

Having worked in the banking system in the UK, if we were presented with a cheque from a bank account outside the UK it would be sent to the international clearing house or to the actual bank in whichever country, clearing time is usually around 6 weeks. However, if it is a UK bank cheque it will usually take between 5-10 working days, there is no charge for this in the UK, unless it is a business account.

The teller/cashier could be referring to Capital Gains Tax, link here: http://www.hmrc.gov.uk/cgt/intro/working-basics.htm#5, as your friend has gifted the money to a family member.

http://www.chequeandcredit.co.uk/cheque_and_credit_clearing/cheque_clearing_timescales_%282-4-6%29/

[prestburypark]

I have banked cheques for far larger than that recently with no questions asked..it has provenance, the name of the payer and payee are in no doubt.

Cash deposits however , and many cash transactions are greeted with "where did the money come from" to which I always reply: "I worked for it".

I doubt a teller would ask that question of a cheque...unless the person paying it in made some kind of suspicious comment.

However, after Cyprus, don't expect to hang on to any savings in your UK bank once quantitive easing has failed and the government wants some cash to give to Pakistan, or the windmill industry, but thats another rant.

[yogi100]

I have banked cheques for far larger than that recently with no questions asked..it has provenance, the name of the payer and payee are in no doubt.

Cash deposits however , and many cash transactions are greeted with "where did the money come from" to which I always reply: "I worked for it".

I doubt a teller would ask that question of a cheque...unless the person paying it in made some kind of suspicious comment.

However, after Cyprus, don't expect to hang on to any savings in your UK bank once quantitive easing has failed and the government wants some cash to give to Pakistan, or the windmill industry, but thats another rant.

You are not ranting PP, you are voicing genuine concerns that many of us have. It's somewhat sinister when a bank employee tells a customer she may be liable for tax on a cheque from her father regardless of what type of tax it may be especially after the goings on in Cyprus. The father is elderly but well and fit and not yet ready for the knacker's yard but you would not be the first person to mention that Cyprus may have set a precedent for all of us who had put a few quid aside for our old age in the EU.

[breadbin]

This is nothing new.

Gifts over a certain amount have always been taxable.

[Basil B]

Agree with many posters questioning of the OP

Guess there was a misunderstanding, I think the banks have to report transaction of certain types over a certain values to HMRC but I do not think they have to inform their customers they are doing so.

May be the teller just advised his daughter that she may have to complete a HMRC "self assessment" form to declare the gift, if she receives other monies which are subject to CGT , which total in excess of £10,600 in the Tax Year 6/4/12-5/4/13(today) she must pay 21% CGT on the amount above £10,600.

Is this just another resentment of paying tax.

[BlackPuddingBertha]

There is no such tax that has anything to do with a bank teller. What the teller probably meant was that the deposit may be taxable depending on the circumstances, and that the transaction may be reported to HMRC by the bank.

In fact from the description given by the OP there would probably be no tax liability anyway, though it's hard to be sure without knowing all the gory details.

[breadbin]

The correct I information is this.

If a bank or any other financial institution, high value car dealer, solicitor etc.etc. has an obligation to make a disclosure to SOCA via their MLRO if they suspect a transaction is suspicious.

All they need is suspicion.

If they do not disclose this info and crimes are committed, eg money laundering, they the institution is liable to prosecution.

The disclosures basically absolve the institutions from allowing their businesses to be used for criminal acts.

So, as an example, if the OPs daughter has her salary credited each month of say £1500, then after a time tries to credit a cheque or cash the bank will it should ask where these funds are from. If they are not satisfied or just a little suspicious then they have a legal

Duty to make a disclosure to protect themselves.

There are literally 1000's of businesses making these disclosures everyday but no one ever know about them as they are, for want if a better word secret,

Hope this clarified things a little.

[topt]

To the OP just curious but did the two other adult offspring have the same issue - or did they just bank the cheques as normal and nothing was said?

Sounds like the daughter needs to change banks or do some reading herself.......

[chiang mai]

The correct I information is this.

If a bank or any other financial institution, high value car dealer, solicitor etc.etc. has an obligation to make a disclosure to SOCA via their MLRO if they suspect a transaction is suspicious.

All they need is suspicion.

If they do not disclose this info and crimes are committed, eg money laundering, they the institution is liable to prosecution.

The disclosures basically absolve the institutions from allowing their businesses to be used for criminal acts.

So, as an example, if the OPs daughter has her salary credited each month of say £1500, then after a time tries to credit a cheque or cash the bank will it should ask where these funds are from. If they are not satisfied or just a little suspicious then they have a legal

Duty to make a disclosure to protect themselves.

There are literally 1000's of businesses making these disclosures everyday but no one ever know about them as they are, for want if a better word secret,

Hope this clarified things a little.

And this has what to do with tax being with held?

[breadbin]

Nothing, but neither does a bank employee even mentioning a tax issue as tax being paid or not is none of the banks business.

I was trying to clarify and correct that banks do make financial disclosures but they DO NOT refer or disclose to HMRC as mentioned.

I hope that clarifies any misunderstandings or confusion.

[BlackPuddingBertha]

I was trying to clarify and correct that banks do make financial disclosures but they DO NOT refer or disclose to HMRC as mentioned.

Banks may be more likely in this instance to report the transaction to SOCA than to HMRC, and you are correct that I should have made this clearer and not lazily used HMRC as an abbreviation for "the relevant authorities". However banks certainly do report things directly to HMRC. Interest paid, for example. I think there is also a fairly recent arrangement whereby they can report other transactions.

[LeCharivari]

Sounds like a particularly stupid daughter.

She didn't check any details but instead just got annoyed at the possibility that she could be "contributing to the legions of freeloaders now resident in the UK" and mailed the cheque back - if she didn't want it and had any common sense at all she could have destroyed the cheque instead.

As has been made clear already, this NOT "yet another UK tax" - just yet another stupid person.