MKG2412

Hi there

Coming closer to coming back to the uk after many years in Asia. Working through all the issues of a move I have came across an item on the uk gov.com website and wonder if I am reading it correct.

We have saved up for retirement before our state pensions kick in.
Question - Will we have to pay tax on the savings that we bring back with us?

Neither myself nor my husband will be working when we come back to the uk, we only have the monies we saved to live on.

Would appreciate some insight into this tax issue.

Thanks in advance.

robin1234

That's a general United States government website you've linked to. Do you have a specific UK government webpage you can link to that alerted you to the concern you've expressed?

Because in general, no, after-tax savings (money in the bank for instance) are not taxable.

MKG2412

No it's the UK website. Here is the link I looked at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/528018/RDR1-residence-domicile-remittance.pdf

I read point: 1.5 UK domicile - tax liability. Where it talks about paying UK tax "brings (or remits) to the UK"

We will follow uk residency requirements (183 days 1st tax year back, 91 days subsequent tax years but will also live overseas for the majority of the year.

So are we liable to pay tax on our savings on reading of this article?
Thanks

durham_lad

As stated above HMRC will not tax you on the savings you bring in. Once you are tax resident HMRC will most likely tax you on the earnings and interest your overseas after tax savings generate, but you can continue to move the savings themselves into the UK without any HMRC taxes.

durham_lad

That section I think refers to the income you make while you are living in the UK, " If you are UK resident but not domiciled in the UK there are special rules which might apply to your foreign income and gains. "

I assume the savings you talk about were from income made during the years you were not UK tax resident in the UK.

MKG2412

Yes savings are from our time in Asia.

durham_lad

You should be just fine.

We have a lot of savings in the USA from our time there and we moved back to England this year, and will be tax resident in both the USA and UK this year. I have been moving chunks of savings over to the UK with the favorable exchange rates and plans to buy a house. I am keeping detailed records of all the interest and dividends all our savings are paying out as I expect to only be liable to UK taxes on those earnings distributed after we landed in England with intent to stay. (The UK and US tax all worldwide income)

Pistolpete2

To my way of thinking there is a rule that one should never put questions regarding complex questions to a discussion forum. Tax is complex and Residency and Domicile are very complex. I'll do the best that I can.

HOWEVER, your HMRC detail refers to Residency and Domicile and the Remittance Basis. It is highly unlikely that one would have sufficient savings income as a non-domiciled to justify claiming the Remittance Basis for taxation because when claiming it one loses the personal allowance of 11,000. Presumably non-doms also lose the 2016-2017 and thereafter 1,000 savings allowance and 5,000 dividend allowance.

Most UK taxpayers pay their taxes on world income on an arising basis. Some UK resident taxpayers have been able to show that they are not domiciled (non-dom) in the UK for tax purposes, either because they have lived overseas for many years or because for instance, their father was not UK domiciled when they were born in the UK or wherever. A non-dom who has high non-UK source income but is UK tax resident is well-served by claiming to be taxed on the Remittance Basis so that his/her vast world income from outside of the UK is not UK taxed until they actually remit some of it when that part is UK taxed. As time progresses there are fees attached to a remittance basis filing as well.

You have stated that you intend to spend the bulk of the year outside of the UK so you could claim the remittance basis IF you can show that you still are not domiciled in the UK and it is tax worthwhile to do so BUT this window of opportunity closes next April when you will no longer be able to state that you are a non-dom if you were born as UK domiciled and return to the UK and take up residence.

You obviously know that IF you become tax resident you would be UK taxed on your world income BUT to be clear it is only in respect of income that ARISES (in the case of savings is credited) AFTER you have become UK tax resident in normal circumstances because you are normally entitled to split year treatment in the year that you arrive so that no tax is payable on income before the effective date of arrival, normally the actual date of arrival. IF you then become non-resident for UK tax purposes in the next year after arrival there is no split year treatment in the arrival year so you would have to pay tax on that savings income regardless, subject to double taxation treaties, if any. You know it shouldn't be too big a deal anyway because if you are tax resident you get the full personal allowance of 11,000 each which should be adequate before you get the State Pension.

See what I mean about complex .

Note that it seems that if you spend the bulk of the year outside of the UK and outside of the EU (and who knows what the new post-brexit rules will be) you will not be able to gain any sort of access to either the full services of the NHS or NHS funding apart from doctor's visits.

Pulaski

It's really not that complex. If you move to the UK to live, any money that you already own before you move is not taxed when you bring it to the UK. Any money you earn, whether by employment, self employment, or on investments, after you return to the UK is taxed in the UK.

There are some nuance for people who have more complicated circumstances, but my summary above likely covers the vast majority of people.

nun

As others have pointed out there is no UK tax on money your earned while resident overseas when you bring it back to the UK. However, once you are a UK resident and intend to stay in the UK for an extended period you will probably be taxed on your worldwide income as it arises. So if you have investments overseas you should watch out for non-UK reporting funds and "mixed funds" and also any tax liabilities where the funds are based. If you have foreign pensions then you should also understand how they are viewed by HMRC.

MKG2412

Hi All

Thanks for all these replies. Much appreciate it so keep opinions coming as I navigate this move

nun

If you describe the general nature of your "retirement savings" then the opinions might be a bit more useful.

MKG2412

Hi
It!' Money saved up no investments, no property etc. just cash.

Will probably look at making it work for us once in the uk.

spouse of scouse

In that case you don't need any more opinions, the one you've got saying you don't pay tax on savings you accumulated outside the country aren't taxed is all you need. Of course, any interest these savings generate once you're living in the UK permanently form part of your taxable income. Not that you have much to worry about as bank interest is negligible!

My husband and I are in a similar situation to you. We moved from Australia, he's the Brit. We've invested our savings in buy to let property, which will allow us to be totally self sufficient. You have to go into it carefully, to be a decent landlord there's over 100 regs you need to follow, but it can be rewarding both personally and financially.

If you buy wisely, pay cash, develop good relationships with tenants, keep your property/ies well maintained and (my strategy, mightn't be for everyone) keep the rent below market rates for good tenants, you'll beat bank interest hands down and quite likely enjoy yourself at the same time

angie_329

This probably referes to 'non- doms'. People born overseas who move to the UK and want to keep their 'non-domicile' status. If you were born in the UK you are usually considered UK domiciled, regardless of your country of residency. Domicile status affects inheritance tax liablity and overseas income, amongst other things.

'non dom's' get special tax breaks on income overseas ( remittances to the UK) if they pay an annual fee and they can only use non dom status for a few years. They are usually wealthy people who spend a lot of money in the UK.... it's a very complex area. I am not a tax expert so this is very general info only.

If you are UK domiciled (probably if you are UK born and bred ) . and return to the UK to live from abroad ... (i.e to take up residency ) you will pay tax in the UK on any earnings/ and on the income generated on any savings worldwide. However as other posters have written, savings that you have paid tax on already abroad should be tax free to bring into the UK.

What are the tax implications of bringing funds into the UK from abroad?

Ask the experts: Must I pay UK tax on my savings earned abroad? - Telegraph