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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4075
Experience:  FCCA FCMA CGMA ACIS
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I am UK tax resident, not UK domiciled, on remittance basis. I

Customer Question

I am UK tax resident, not UK domiciled, on remittance basis.

I am working in UK, and get my salaries taxed in UK, paid on Offshore account ( isle of Man ).

I am about to buy a property, financed vua Mortgage and 20% deposit which I will fund from such offshore account.

What are the precaution I shall take to avoid this two be taxed a second time ?

Thanks for you advise .
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

As your salaries are taxed in the UK there should be no problem bringing in moneys for the deposit from the IOM (which remember is outside the EU). HMRC advice is:

'If you are taxable on the remittance basis you are liable to UK tax in the normal way on your UK source income and gains. But you are only liable to UK tax on any remittances (amounts) of foreign income and gains that you remit to the UK (see below for what we mean by ‘remitted to the UK’).

If you choose to be taxed on the remittance basis you must include these remittances on your tax return. The supplementary pages that you complete will depend on what it is that you have remitted. For example, you may need the Capital gains summary pages, the Employment pages or the Foreign pages.'

So there you are; if the deposit moneys brought in from the IOM are 'foreign income and gains that you remit to the UK' then these amounts are taxable, but if they merely represent saved salaries etc already taxed in the UK then the transfer is outside the scope of UK taxation.

I would suggest that you transfer the moneys direct to your mortgage provider or the property vendor as an added precaution. What the mortgage lender does is his problem, not yours. I do hope I have been able to shed some light on your problem.