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Topic: Moving money - Tax?  (Read 426 times)

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Moving money - Tax?
« on: November 30, 2020, 10:06:47 PM »
If I want to transfer a large sum of money from abroad to the UK to buy a flat, are there any tax obligation as UK resident on the UK side so it follows the FCA and HMRC rules?

Would they care about the origin where the money from (e.g. savings or from a sold property) and would it make any difference if the money comes from my own bank account or as gift from my parents to support me?


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Re: Moving money - Tax?
« Reply #1 on: November 30, 2020, 10:34:59 PM »
If the money comes from sources that have already been taxed then no HMRC taxes will be levied. When we moved a large sum over to buy our UK house we had to show where it came from but it was not taxed. A year later our son went through a similar process but in his case we had also made a substantial gift to him to help buy the house, so we had to show where the gift came from. Again, no tax implications.

In our case we had sold our house in the USA before we moved back so there never was going to be any HMRC tax issues on the proceeds being moved over.
Dual USC/UKC living in the UK since May 2016


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Re: Moving money - Tax?
« Reply #2 on: November 30, 2020, 10:56:48 PM »
Thanks durhamlad. Okay, so what if the money is not taxed? How do you file it in the UK then?

In your case, to what extent do they need to see proofs? Would bank statement alone be enough?


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Re: Moving money - Tax?
« Reply #3 on: December 01, 2020, 08:54:10 AM »
Thanks durhamlad. Okay, so what if the money is not taxed? How do you file it in the UK then?

In your case, to what extent do they need to see proofs? Would bank statement alone be enough?

There is nothing to file, you simply move your money over, no need to report anything at the time or when you file your taxes. Since almost all our income comes from the USA I routinely move at least $50k/year to the UK.  That actual income is declared and taxed by HMRC when I file a self assessment each year, but moving largish chunks of money needs no extra paperwork.  The UK taxes all worldwide income from its residents and my wife and I are taxed on an “arising basis” which means each year we report all income we make in the USA in the year it happens regardless of when we actual move that money to the UK. This includes pensions, dividends, and capital gains.

When buying houses, in our case I provided a statement from our US brokerage. In our son’s case he provided a bank statement, and I provided a brokerage and bank statement showing  the gift money going from us to him. They really only wanted assurance that the money was legally obtained, nothing to do with taxes. In both cases it was the lawyers managing the cash house purchases that wanted proof.
« Last Edit: December 01, 2020, 09:00:52 AM by durhamlad »
Dual USC/UKC living in the UK since May 2016


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Re: Moving money - Tax?
« Reply #4 on: December 01, 2020, 09:14:20 AM »
If I want to transfer a large sum of money from abroad to the UK to buy a flat, are there any tax obligation as UK resident on the UK side so it follows the FCA and HMRC rules?

Would they care about the origin where the money from (e.g. savings or from a sold property) and would it make any difference if the money comes from my own bank account or as gift from my parents to support me?
If you have been filing UK tax returns on the arising basis since you moved to the UK there is no additional UK tax on any remittances because you will already have reported worldwide income & gains as they arose.


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Re: Moving money - Tax?
« Reply #5 on: December 14, 2020, 12:20:43 PM »
Hi, I just wanted to ask a similar question.
My husband is a USC resident in UK.  He is selling his house next year, and we will be moving the money over here to use as a deposit for a house.
Do we have to fill in a self assessment tax return and then claim back any tax paid? 
Also, when does the USA tax the money from the house, is it straight away, or is it when we submit the tax return in April?

Thanks for any help you can give.

Also, we have been submitting tax returns using Turbo Tax since my husband arrived.
Should he have also been submitting a Report of Foreign Bank and Financial Accounts (FBAR) if is he has less than $10,000 in there?

Thanks again

Gaby
* 1993/1994 dated my future husband
* Oct 2013 back in touch after 20 years
* Feb 2014 flew to US for 10 days to visit him
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* Oct 2014 husband flew to UK for 2 week holiday
* Jan 2015 sent off visa application
* Jan 2015 visa approved!
* Apr 2015 husband moved here
* Oct 2017 FLRM approved!
* Nov 2019 Life in the UK Test Passed!
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* Jun 2020 BRP appt
* Jun 2020 IPR approved! (without priority)


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Re: Moving money - Tax?
« Reply #6 on: December 14, 2020, 05:47:49 PM »
You would need to file in the uk assuming this isn’t his primary residence. Because (in theory), it could be subject to some capital gains tax in the uk. Using us tax to offset this, it’s unlikely he’d owe though!!

Fbar only if he has an account over $10,000.


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Re: Moving money - Tax?
« Reply #7 on: December 14, 2020, 07:01:31 PM »
With FBAR it is the aggregate of all foreign account balance maximums during the year, which includes counting the same money multiple times in some cases. e.g. your UK checking account gets to £6k at some point so you transfer £5k to a new savings account. You still only have £6k but the maximum value in those 2 accounts is £11k using FBAR accounting.

Also if you have any pension plan savings where you have signature authority those balances count towards the $10k
Dual USC/UKC living in the UK since May 2016


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