CraigM

Hi Editha, if you always get the best rate from FirstDirect that is fantastic! The currency exchange company I use always beats my banks rate, hence my statement..

With regards to the TAX, Michali is correct, any interest accrued is liable to tax, I also pointed out that depending on the amount it is worth going down the offshore route, there are facilities that are available offshore that are extremely beneficial. It all depends on the amount of money being transferred.

dunroving

That is correct. The first independent financial advisor I spoke to shortly after returning in 2006 kept going on about how I would have to pay tax on all of the savings I was bringing into the country. He had me panicking I would lose 20% of my savings. At some later date I realised I would only pay tax on interest. That's why I would never use an IFA.

Editha

My understanding is that there is a tax convention between the USA and the UK preventing double taxation. That means that if someone brings in money from the USA when they become resident in the UK, it will not be taxed, since it has already been taxed in the USA.

Obviously, if they then deposit the money in a UK savings account and it accrues interest, the interest will be taxed in the normal way.

Editha

Explain that. What are the benefits exactly, apart from the benefit to yourself from your arrangement fee?

dunroving

That is correct, the dual taxation treaty means you won't pay tax twice on the same income. However, you might pay additional tax if, for example your tax rate is higher in one country than the other.

Editha

I don't think that is correct Dunroving. It certainly isn't for the UK/Canadian treaty.

If I'm resident in Canada and have an income of $100,000 taxed at 20% (fictional rate), when I move to the UK taking my 100,000 with me, they won't take another 20% off because I would have paid 40% in the UK.

CraigM

To be honest there would be no benefit to me as an adviser, it's up the individual to research it himself. I do not work in the UK or US.. I was just passing on my knowledge and trying to help out..

Again the benefits all depend on the amount of money being transferred...

Editha

Strange then, that setting up offshore bank accounts is one of the services offered by your company on their website. And they do it for free? How kind of them!

Pulaski

At the point at which you earn it, possibly, but moving previously taxed money between the US and the UK, or vice versa does not, in and of itself, create a tax liability.

CraigM

We seem to have got off on the wrong foot? Have I offended you in some way? If so then I am sorry.

We are not a bank, so we can assist with the set up off offshore bank accounts and yes, we do not charge the individual for this benefit.

The facilities I was talking about however, are not bank accounts, they would be Open Architecture Personal Portfolio Bonds, these are usually used with high net worth individuals, and can be used for mitigating future tax liabilities using the tools available within the structures, again depending on the amount invested, and depending on the country of residence of the individual, they can also be used for Inheritance tax planning, and estate planning, among other things.

I would not be able to advise the OP, as being in the UAE we do not fall under the FCA in the UK. Therefore no monetary benefit to me as an individual.

I was merely trying to give some advice, which I am now quickly regretting on doing.

dunroving

No, you won't get "back-taxed". However, in some situations a person would be UK resident for tax purposes and if US tax is already taken for, say 20% thaat doesn't mean you would get away with the other 20%.

It dependson where you aare resident for tax purposes, which country/ies you are citizens of.

dunroving

Yes, it is all tied in with timing of the gain, residence for tax purposes and citizenship (if you have US citizenship, for example). I was just clarifying that the dual taxation treaty doesn't mean you will only pay tax in one country. It just means you won't pay the "same" tax twice.