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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Good day, I will describe a situation first and then ask

Resolved Question:

Good day,
I will describe a situation first and then ask about its tax implications.
My father lives in South Africa, and I live in the UK. He has a fair amount of money (I believe it's approx £120,000.00) in an investment account in Switzerland. He also has dementia (age-related). My sister (in South Africa) and I have power of attorney on the account, which means that we have visibility over what happens but no authority to make decisions about it.
The Swiss financial advisor has suggested that in order to avoid problems later, that we try to get him to sign over the account to us (50/50 split), and am trying to decide whether to proceed with this.
I would like to find out about the tax implications as far as HMRC in the UK is concerned. I believe that if the money stays in Switzerland, then I will be liable for UK tax on any interest that is earned from my share of the account, and so I would have to do a tax return and declare this.
I am curious, however:
1. Will any tax be due on the initial amount that is transferred into my name?
2. Eventually I may wish to move some or all of my share of the money to the UK (e.g. to pay off part of my mortgage and/or other debts). What will be the UK tax implications if I move money to the UK from Switzerland, given that it is not strictly an inheritance as it will be transferred to me while my father is still living?
Thank-you very much for your advice on this matter.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Is your father a UK national?
Customer: replied 1 year ago.

Hi. No, he is a South African national.

Customer: replied 1 year ago.

Hi, no he is a South African national. He has never lived in the UK.

Expert:  TonyTax replied 1 year ago.
Thanks.

As your father is not a UK national and, assuming that the gift will be made from a non-UK source which it will be, there will be no UK Inheritance Tax implications for your father's estate should he die within seven years of making the gift.

1 As the recipient, you will have no UK tax to pay on the gift itself.

2 There will still be no UK tax on the capital. Assuming you pay UK tax on your worldwide income and don't use the remittance basis of assessment, you will be liable to UK tax on any interest you earn with credit being given against the UK tax liability for any tax paid in Switzerland on the same income.

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