Moving Savings to UK & Tax Implications

I want to move my savings from an offshore bank to one that guarantees savings here in the UK. However, I'm worried about taxes. Part of the money is from the sale of my stateside house, and the other part is from working (which I paid UK tax on). I have this fear that they'll consider the lump sum a big paycheck and seize 40% of it for taxes. I know I'll have to pay tax on it when I get my UK taxes done this year (on the interest earned), but is there any basis to my fear of losing a large chunk of it on transfer? My tax advisor hasn't gotten back to me, so I was hoping someone here would know. Thanks for your help.

I want to move my savings from an offshore bank to one that guarantees savings here in the UK.

I think, two parts of that. Move the money from offshore? That makes sense. Then, the second part, move the money to the UK? Why? Why not, for example, move the money to Ireland, where the Government has guaranteed 100% of deposits?

I want to move my savings from an offshore bank to one that guarantees savings here in the UK. However, I'm worried about taxes. Part of the money is from the sale of my stateside house, and the other part is from working (which I paid UK tax on). I have this fear that they'll consider the lump sum a big paycheck and seize 40% of it for taxes. I know I'll have to pay tax on it when I get my UK taxes done this year (on the interest earned), but is there any basis to my fear of losing a large chunk of it on transfer? My tax advisor hasn't gotten back to me, so I was hoping someone here would know. Thanks for your help.

Even your tax adviser will not know the entire picture because the new laws are still unclear on several specific US/UK issues.

You have presumably claimed the remittance basis already on previous UK returns & decided if the cash you brought to the UK when you first got here was capital or income.

The law changed so the UK now has specific & complex rules.  In essence if you remit the money here you could be taxed on accumulated income (interest) plus currency gains.  The US may give you credit under the double tax treaty for the UK tax but only if you pay that UK tax in the same US tax year.

If you wish you can claim the remittance basis this year and and lose your personal allowance & annual CGT exemption, but you have doubtless budgeted for that loss already since the law change was big news this year.

As I understand it, the house money is not taxable, but the other money shouldn't be (interest on both would be, of course). Consider them two pots of money. It sounds like you've mixed the pots together?

If so, it's important to separate them. Create one account for the house money, another account for other money. As I understand it, if the pots of money are mixed, the UK government will say the untaxable money is the very last money transferred out of the account. It's a version of last hired, first fired -- first remitted, highest tax. I think that's how it works. I'm not a tax advisor!

You might want a third pot of money that all the interest that has arisen since you moved to the UK goes into, since that's all taxable.

In sum, you may want to split into 3 accounts -- 1) house money, 2) money you already paid taxes on, and 3) interest on 1 and 2.

Is that helpful at all?