Amateur Money Laundering

I have some cash in a bank back in America. If I wire it here to England, it is subject to UK taxation as a remittance (the same as if I earned it).

My friend will be visiting me soon. Assuming that it is under $10,000 (and therefore need not be reported to US Customs), could he go to an FX place in New York, get a pile of 50 pound notes and just bring it over in his hand luggage? There is no limit to the amount of currency that can be brought into England, according to my Google Search.

Anyone done this?

I have deleted my post on the grounds that any knowledge I have of this topic comes from before new money laundering laws came in, so I may be wrong.

My apologies...I always like to help people get one over on Gordon Brown, but alas I don't think I can.

Vicky

Why did you name this thread amateur money laundering? What are you laundering it from? I say that because money laundering is a serious matter over here. Maybe you just used the wrong term?

Yes, I find the US tax tax credit pretty much disappears after 30K pounds. Then you are taxed at the investment rate (it's from Municipal Bond income, and England doesn't recognize the tax exempt status of these bonds -making accounting for them a real tax reporting headache).

In fact, Bank of New York will deliver the pound notes to your door at a so-so rate for $9. Since 4-5 grand in pounds wouldn't even buy that much of a holiday over here if you golf or go to spa's, it seems very explainable.

It seems safer and less traceable then the standard dodge, using an off-shore or american-based credit card to buy things from a dollar account located outside England. Gordon Brown will  be going after that soon.

I am told that chances of an Inland Revenue Audit over here are very, very low -but if they catch you out and demand all your bank and credit card statements.....

Why did you name this thread amateur money laundering? What are you laundering it from? I say that because money laundering is a serious matter over here. Maybe you just used the wrong term?

Jules- I'm thinking the thread title was a little bit tongue-in-cheek (right?)

A spicy headline certainly doesn't hurt with the number of views!

But techically speaking, if you moving funds into a different format to evade taxation, then you are in fact giving those funds a light rinse -if not a full-on laundering.

Likewise, to my expat friends, if you are charging a pair of jeans at the Gap on your USA-based VISA card, that is viewed by Inland Revinue as an "in-kind remittance" and strictly speaking should be listed on your tax return as remitted income. If you receive any cash or in-kind benifet, it is taxable over here at the standard rates. If you did not, then you too have evaded taxation illegally.

The poetry of inland revinue says that you may AVOID taxation, but you may not EVADE taxation.

And they will decide which is which, by the way.

Melvin - you are a US citizen who from what you say is resident in the UK but not domiciled here.

You have investment income from munis, which is tax-exempt in the US.  You would like to bring the equivalent of £10,000 of this income to the UK.

If you follow the method you outline then the £10,000 will be taxable in the UK as a remittance of non-UK investment income.  You will owe UK tax at your marginal rate of UK tax.

If you fail to report this remittance on your UK tax return then you will be evading UK tax, which is a criminal offense, that could land you in jail.

If conversely you buy a pair of jeans in the US and bring the item here then there is no taxable remittance unless or until you sell the jeans for cash in the UK (of course jeans would get you nothing but if you substitute diamonds, gold or antiques for jeans then the theory should become clear).

Have you obtained advice on remittances, structure of non-UK bank accounts and investments?  There are plenty of legal ways to reduce global taxes by structuring these things legally.

Do you need to transfer all the money at once as a lump sum?