How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15709
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

If i am looking to buy a property in the UK with cash i have

Customer Question

If i am looking to buy a property in the UK with cash i have earned abroad, do i have to pay any tax on that cash from abroad ? I am a British passport holder, UK resident but non Dom

If my father gave me cash (who lives abroad) to buy a property in the UK, would I have to pay any tax on that ?

What disclosure would I need to make on my tax return form ?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Hi.

 

Please refer to section 5 of HMRC6 as part of my answer to your questions.


As you are not domiciled in the UK you have several choices as to how to deal with non-UK source income and gains as follows:

1 Overseas income or gains you bring into the UK may be taxable in the UK (see below on money held before you came to the UK). Depending where it comes from and assuming there is a double tax treaty between the UK and the country of origin, you will be able to offset any foreign tax paid on that income or gains against your UK tax liability if you have one on the same income.

2 Paragraph 5.1.1 of HMRC6 deals with very small amounts of non-UK income. If you meet the criteria set out there and have less than £100 of overseas bank interest, you won't have to pay UK tax on it.

3 If you have overseas income which you have not brought into the UK of under £2,000 in any one tax year you can use the remittance basis of assessment which means that you do not have to pay tax on that unremitted income. You will keep your entitlement to the UK personal allowances and Capital Gains Tax exemption. See paragraph 5.5.1 of HMRC6.

4 If the unremitted income is £2,000 or more and you don't want to pay UK tax on it, you will need to make a claim for the remittance basis of assessment to apply. You may lose your entitlement to the UK personal allowances and the Capital Gains Tax exemption. See paragraphs 5.5.2 and 5.6 of HMRC6. In addition, depending on how long you have been in the UK, you may have to pay the Remittance Basis Charge of £30,000 or £50,000 for any tax year you choose to be taxed on the remittance basis . See paragraph 5.7 of HMRC6 and section 1 of the document here for more information on the RBC.

 

In order to avoid paying UK tax on foreign source income and gains that you earned or made before you came to live in the UK, you really need to separate that money from foreign source income and gains you have made since your arrival in the UK. Then , if you need to being money from abroad into the UK, you can draw on funds you had before your move to the UK and be able to demonstrate the fact if you are asked by HM Revenue & Customs.

 

If your father gifts you some money, you would not have to pay UK tax on that money. There may, however, be Inheritance Tax issues for your father's estate if he dies within seven years of making the gift and it is made from assets held in the UK, though not from foreign currency accounts held in UK banks.

I hope this helps. Let me know if you have any further questions.

Customer: replied 3 years ago.


Thank you for your response. I just wanted to get your thoughts on the following scenario.


 


If my brother and I buy a property of 500k GBP jointly under the following scenario:



  • My 250k is gifted to me by my father from money he has earned abroad (he is not a resident of the uK and hasn't been for 30 years) - do I need to declare this anywhere ?

  • My brother's half (250k) is paid by two sources of money

  • 1) Money he has earned and paid tax on in the UK (200k). He earned this money in the UK but he loaned this 200k to my father over the last 2 years as my father needed pounds sterling (interest free loan). My father paid him this money back via the purchase of his share of the property. We have bank statements to prove that this money was earned in the Uk by my brother and transferred to my father to his UK account. My father would only be reimbursing my brother of this money via the purchase of my brother's share in the property.

  • 2.)money my brother earned from my father as part of an advisory fee when my father sold his company in 2007 (which was not in the UK). The fee was 50k pounds sterling. This advisory took place when both my brother and father were not resident of the uk (and both are non Domicile). The agreement was that my father would pay my brother the 50k pounds when he buys a property and hence this money was also transferred to my brother via the purchase of his share in the property


In these scenarios do any of the above need to be disclosed to the tax authorities and are any of these amount taxable ? Do any of the above have to be disclosed in the tax return forms (if so, what ?)


Thanks

Expert:  TonyTax replied 3 years ago.

You don't need to inform any government agency of the gift. However, you should give your bank advance warning of any substantial incoming deposit as they have money laundering procedures to follow which may delay your access to the money otherwise. Your father should write you a letter confirming the gift so that if you are asked by the tax office how you came to acquire £250,000, you will be able to give them an answer.

1 That is not a gift, just a repayment of a loan. It should not cause a tax problem for your brother especially since you have proof of the loan. It need not be declared in a tax return.

2 This could be a problem for your brother unless there is paperwork to confirm the source of the income and when it was earned. The fee was not paid to him until he was resident in the UK notwithstanding the fact that it was earned whilst he was a non-UK resident. However, I would not declare it as a remittance of income to the UK as it was earned before your brother was resident in the UK. If he is ever asked about it, he should be able to prove it was a fee related to work he did whilst resident abroad. An invoice from your brother to your father dated at the time the work was done should suffice as proof. He can say his father was holding it for him until he needed it.

Expert:  TonyTax replied 3 years ago.
Hi again.

You posted your original question on 26 June. I answered it on the same day. You responded on 16 July, 19 days later, with more questions. I answered those on 16 July.

It is now 21 July. If you have any further questions please ask them. If not, would you please click on Accept or rate my answers as OK or better so that I get paid for my work. Thanks.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Last | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    1772
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    464
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2596
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    268
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions