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 taxadvisor.uk Your Own Question

taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

Husband and wife have invested cash in India. They are both

Resolved Question:

Husband and wife have invested cash in India. They are both UK residents, and would be classified as UK domiciled. Does the interest being earned in India need to be declared and taxed in the UK? There is no tax being deducted in India. Can the interest being earned be deemed as relating solely to the wife (as the husband is a 40% tax payer)? How can we document this?
Also, due to exchange rate movements, the cash amount is now worth less than the original GBP investment. Can this loss be offset against the interest to pay tax on the net amount in GBP?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If the savings account/investment is in joint names, then interest earned on it would be deemed earned equally, i.e. 50:50. If you are able to support the claim that monies invested were not from joint source but disproportionately then you could argue that the interest should be taxed in that proportion.

As you are UK resident and UK domiciled, you are taxed on your worldwide income and gains and foreign interest earned should be declared on supplementary pages SA106 - Foreign.

You can not offset your investment loss against the interest earned for income tax purposes, I'm afraid.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Thanks for your message. Can you give me some advice on how I can ensure the interest is being taxed solely under my wife's name eg can I document a gift to her of the sum, which she has invested in India in our joint account?

Also, we have added my wife's mum as a signatory to the account, for ease of administration. The funds are not hers. Do we need to document this too to ensure that my mum in law is not taxable?

Expert:  taxadvisor.uk replied 2 years ago.
.Thank you for your reply.

If you were to gift the capital sum to your wife and the account was in her sole name then only she would be liable to UK income tax on interest received on that investment.

If the account is in joint names for convenience only but the documents support the fact that the investment is a gifted sum from you then it would suffice.

You would be wise to document the fact that your mother-in-law is purely a third party signatory to the account and that she is not a particant as far as the investment goes.

I hope this is helpful and answers your question.
Expert:  taxadvisor.uk replied 2 years ago.
particant should read participant .. sorry for typing error.
Customer: replied 2 years ago.

Thanks for the update. I need to clarify one more point, which I should have mentioned in my first question.

We are taxed on an arising basis, which generally means when the money is paid. Currently, we are accruing interest, but not being paid this interest. This is due to the fact that the funds are placed on deposit on a compounding basis. So do do we declare this income when the funds mature and we actually receive interest?

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.

You should declare interest when received into your account and not on accruals basis.

I hope this is helpful.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

Customer: replied 2 years ago.

Apologies, I need to clarify a point raised earlier by you. In the first reply you said that any capital loss. In light of your current reply, my understanding has changed. Eg funds transferred to India are GBP 100. Upon maturity of compounding, funds credited to my account in India are equivalent of GBP 95, due to adverse exchange rate movements. Can this loss of GBP 5 be offset against income tax?

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply..

If your investment has lost money then it is a capital loss and you can't offset this loss against interest received and therefore get income tax relief.

You have to separate capital from income.

I hope this is helpful.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you

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:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    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:

    2333
    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:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    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:

    270
    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