NativeFirst

I have lived overseas in Asia for over twenty years. I have not maintained contact with the UK. Am intending to migrate back. If I transfer savings, say 200k, to buy a house, will I have to pay tax on those savings to the UK taxman?

Bermudashorts

No.

Pulaski

What she said. Transferring money to yourself is not a taxable event.

NativeFirst

Thanks, Bermudashorts and Pulaski. I appreciate your speedy responses.

That's what I would have thought.

Supplementary question: Are there any loops I have to jump through to prove that the transference is not a taxable event? For instance, let's say I move to the UK, become tax resident, transfer the money and buy a house. Might not the taxman enquire as to the source of the money, for instance whether it is the realisation of gains from an overseas property share? It isn't of course - the money is savings over a lengthy period of time. But what if I have to prove the source?

Sorry if my questions are naive, but this is something I have to get right first time.

Pulaski

The taxman won't ask, it just isn't taxable, however you touch on a good point, it is possible that your bank might wonder where you came by the money, and they are unlikely to ask you. ..... There is a risk that they might determine the large wire/ transfer credit to your account to be "suspicious", which means it will be reported to the National Crime Agency. You will never know if this were to happen as the bank is prohibited from disclosing the existence of a Suspicious Activity Report, even in court - it will never/ could never be presented as evidence and the defence lawyers can't request it nor even request confirmation that it exists, nor can the court compel it to be disclosed. It is a "non-document."

There are likely no consequences whatsoever of this were to happen, but it is still best avoided, so I would strongly recommend that you contact your bank before you transfer the funds and give them an explanation of where the funds came from (your occupation, which country, the length of time you lived there, the bank you banked with, etc.) And try, so far as you are able, to ensure that whoever you speak to makes a record in your account file, so when the funds arrive there is already an explanation on file.

NativeFirst

Thanks, Pulaski. That's good advice; I appreciate it. I want to make sure everything is above board and straightforward in starting a new life (or resuming an old one...).

michali

You will only be taxed on any interest accrued from the savings you transfer to the UK and in a simple savings account, that won't be much right now!

We tranferred quite a large sum of money when we relocated here and I called our bank in the UK in advance to ask if it would cause a problem. I was told it would not and we had no problems.

spouse of scouse

You might already know all this, but just in case....

If you want the best foreign exchange rate, transfer your funds through a reputable fx dealer and not your bank. The exchange rates offered by banks are invariably woeful compared with a fx dealer.

I don't know if it's different in Asia, but fx dealers in Australia require the customer to state the purpose the funds will be used for, however the only time I was ever asked to disclose the source of the funds was for a +AU$300,000 transaction that I transferred to buy a property. Both the fx dealer and my UK bank required this information.

Pistolpete2

At post #4 the OP is indicating that he could theoretically have gains to account for after becoming UK tax resident.

for UK tax residents:

Surely (savings) foreign currency (whenever come by) which ultimately ends up being transferred into sterling, or any other currency for that matter, gives rise to a chargeable gain (or loss) upon conversion when compared with the exchange rate when that foreign currency arose (through creation of income or gains) or funds were converted into that foreign currency from sterling or wherever.

It could be small potatoes but if it isn't it surely needs to be declared under HMRC self assessment CGT section.

Pulaski

I don't believe that to be the case for a "one way" exchange. If he had exchanged GBP for foreign currency, they changed it back, the question might be different, but it would depend on a numbers of factors, and there is no certain answer as there have been a number of cases decided over the years on what is assessable for income tax, what is assessable for capital gains tax, and what is not taxable.

Pistolpete2

It's hard to fathom some HMRC manuals but I'm thinking that what I'm referring to is as covered in CG78315:

HMRC CG78315 - Foreign currency: personal expenditure of individuals

in the second paragraph:

"TCGA92/S269 applies only to foreign currency which was specifically acquired for personal expenditure of this kind. If remuneration, interest, dividends or other sums are received in foreign currency, then that foreign currency has not been acquired for the purposes specified in Section 269: it has not been acquired for any specific purpose at all, but simply as remuneration or interest etc. On the disposal of such foreign currency there will be a chargeable gain (or allowable loss) calculated in the normal way."

s269 states that a gain on the disposal of foreign currency acquired by individuals for the personal expenditure outside the United Kingdom of themselves and their family or dependents is not a chargeable gain. This includes expenditure on the provision or maintenance of a residence outside the United Kingdom.

Pulaski

So s269 says it's not chargeable, but I believe the section you highlighted relates to people paid in foreign currency, for example a contractor who bills in USD while living in the UK. I don't think that money saved while working overseas would attract a capital gain tax. That said, so long as the OP moves the money back ahead of or (more or less) simultaneously with his return to the UK, he is unlikely to have an issue to worry about.

NativeFirst

Thanks, michali

NativeFirst

Thanks, spouse of scouse (I am a scouser too). Yes, one has to make a declaration in most countries in Asia too. I guess that is quite understandable in this day and age.

NativeFirst

Thanks, Pistolpete2. Useful to know, but, fortunately, not applicable in my case.