Tax on US money sent to UK + £30K Tax for Remittance Basis?‏

Sorry to cross-post. I posted in Money Matters before I saw the tax board.
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Preparing for our move to the UK, we have been sending (exchanging) money into my wife's UK account. Will this money be taxed? If yes, what might be the tax on £10,000?

I understand there's a double tax agreement between US and UK, and all the funds sent are 'after tax' dollars (not retirement funds) so surely they can't tax us again???

I also heard somehow you have a choice to be taxed on all your foriegn income or only on a remittance basis (taxed on those funds you remit to UK). But to claim remittance basis, you need to pay £30,000 fee? What??? In what backwards world does it make sense to pay a fee of a year's income to get a tax break? Clearly this law is for the super wealthy or corporations to avoid being taxed on offshore accounts?

I am dreading filing my taxes next year.

thanks

It is impossible to say if the remittances will be taxed because you provide no information if they include income (eg interest & dividends) or if they are joint or the historic exchange rates when you deposited the monies.

Thanks for the feedback. The money originally came from salary earned from work (plain old savings) and was deposited in a savings account that earned a little interest, then tranferred to a mutual fund that lost principal, then mixed with more job salary, then to a checking account that earned nothing, then mixed with more job salary. The checking account is joint with my Brit wife.

The exchange rate varied over several transfers between 1.40/£ to 1.55/£ in January to March 2009 time frame.

The account that it was remitted to is individual account owned by Brit wife, but will soon be converted to joint.

I guess it brings up another question: if I myself would be hard pressed to say what part of the 10K was principal vs interest, how would HMRC ever figure it out, assuming I was selected for an audit?

Generally, money you earned before you became UK tax resident is not going to be subject to UK tax even if remitted.

If you do plan on filing the remittance basis, your current bank account structure is not going to work for you.  Do some further research or get a tax advisor.

For initial guidance, rsb may want to read HMRC's Remittance Basis Manual, which can be found here:

http://www.hmrc.gov.uk/cnr/res-dom-tax-amends.htm

The Brit wife is unlikely to qualify for the remittance basis, unless she will be not ordinarily resident in the UK.