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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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If I get a loan from a Qatari bank and transfer it to my uk

Customer Question

If I get a loan from a Qatari bank and transfer it to my uk bank account, will I be taxed? I have got 30,000 GBP saved and want to use the loan to pay for a house outright.
Will my Qatari salary then be subject to UK too? I can pay the Qatari loan off in 4 years and am also expecting a pay rise in September 2016.
UK bank will only help with mortgage when I return to UK and a I cannot be sure when that will be. This seems like my only option and 4 years later it will be paid. Please can you explain tax implications of the transfer of the 70 000 GBP to my UK account.
Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question.

Loans are outside the scope of UK taxation and the transfer to your UK bank account would not attract tax. However, you should warn your bank of its arrival to preclude any money laundering inquiry.

If you are in the UK for more than 183 days in any one tax year then your Qatari salary would be subject to UK Income Tax. If you live and work in Qatar and only visit the UK you should do two things:

Fill in a P85 and send it to your tax office if you have not already done so. It is available on the web and can been submitted on line. There is no time limit to submitting a P85 and HMRC will class you as non resident on receipt.

Do not spend more than 91 days in the UK in any one tax year. In theory these can be averaged out over 4 years, but the general conses amongst experts on this site is never to exceed the magic 91 days.

As I told you there are no tax implications, loans being outside the scope of UK taxation, but warn your UK bank of the funds arrival and their source.

I do hope I have helped set your mind at rest on this matter.

Customer: replied 2 years ago.

Hi,

What about HMRC u turn in taxing foreign loans to buy uk property? Announced 14 Aug 2014? Lots of material online but confusing and not sure of implications in my situation. Thank you.

Expert:  bigduckontax replied 2 years ago.
Here is STEP's preamble to this matter:
'HM Revenue & Customs has announced that non-domiciled UK residents must now pay UK tax on offshore income used as security for a loan.'
Note the wording 'non-domiciled;' you may be non resident, but you are most certainly not 'non domiciled.' It takes a very long time to change a domicile, well over 16 years under UK tax law to arrange a change. Incomers cannot acquire an UK domicile for at least that period. Thus these new rules do not apply to you as your domicile remains UK for the foreseeable future.
Expert:  bigduckontax replied 2 years ago.
Your rating seems a trifle unkind as it appears to have been made before you asked and received a response to your follow up question.
I submit that it should be upgraded.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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