Hello,

I am British and my wife has come to the UK on a settlement visa late last year. We plan to settle in the UK and are planning to buy a house.

My wife has quite a lot of savings from salary and investments that she did in her home country.

She would like to transfer this to the UK, but are unsure if there are any tax implications to doing this?

Kind Regards,

John

No, the savings would not be taxed but any interest accrued here would be subject to income tax.

Merely transferring money has no tax implications, and as a UK resident she would be liable for tax on the interest/ dividends whether the accounts were in the UK or overseas.

Hi,

Thank you for the responses.

If she continues to make investments in her home country and pay tax there, I guess she is not liable to pay tax in the UK if she decides to transfer some money to the UK?

Kind Regards,

John

If she lives (is tax resident) in the UK, she must pay taxes in the UK on her overseas investment income. There are very few exceptions to this rule.

Paying taxes in her home country is not sufficient, and in most cases when you leave another country you cease to pay tax there anyway.

If she has substantial investments, say £250,000 or more, then some advice from a Chartered Accountant experienced in overseas tax issues, preferably with the country your wife is from, would be a good idea.

I'm no expert but believe that if she is resident in the UK then she will be liable for UK taxes on savings and investments anywhere in the world while UK resident, and would want to investigate tax relief in the other country, where she in non-resident. Tax liability for investment income can be quite complicated in the case of some countries.

Some countries have a double-taxation treaty with the UK - I pay tax at source (Australia) on some investment income, so do not have to pay again in the UK. It would depend on whether your wife's home country has a treaty with the UK though.

I also think your wife would benefit from a chat with a properly qualified tax advisor - would probably only take one consultation.

If your wife transfers money to the UK then any bank would want proof of source of income.
It would therefore be prudent to have documentary evidence e.g. sale of property or source of income or savings.

Interestingly enough, when we were returning to the UK with a substantial amount, I called my bank here, with whom we had had an account for many years, and asked if we needed to write a letter informing them of the imminent bank transfer, but was told that was not necessary. The transfer went through fine and, of course, we declare any interest we make ( like almost nothing these days! ) when we submit our tax returns each year.

Good advice.
Unfortunately branch and call centre staff may not be the best source of advice as they may be unaware of the behind-the-scenes activities of the head office in monitoring for possible signs of money laundering or terrorist financing. So I would always recommend notifying your bank of imminent large transfers, whether in one lump sum or several smaller amounts, and trying so far as possible to ensure that the information is put in your electronic file - "please make sure this information is recorded ....".

It might depend on the method you use to transfer funds? I use OFX for transfers from Australia to the UK. I have to declare the source of the funds to OFX, and also what the funds will be used for. Have never been asked by my bank for any additional information, so maybe OFX passes it on to them.

You are correct any information given by you and attached to a wire or similar on-line transfer will (should be) passed to the bank that receives your money. I would still recommend communicating the same information, with more detail, directly to your bank.

The problem is that your bank will never ask for more info. They will decide based on whatever limited information they have or can obtain about you using databases and publically available information, and decide if the activity in your account should be reported as being "suspicous".

Note, it is unlawful for a bank to disclose whether such a report has been filed, or even considered. You have no right to access the information and it is specifically impossible to obtain the information by court order/ subpoena.