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bigduckontax, Accountant
Category: Tax
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I am British but I have been living in Japan working

Customer Question

hello. I am British but I have been living in Japan working as an english teacher for the last twenty-seven years. over that time I have regularly sent money from my savings into mutual funds to a company in hong kong. now my mutual funds are worth about 300,000 dollars. I would like to use it all to buy a house in UK. I don't have many historical documents related to the mutual funds. online the company only shows records going back 6 months. I don't know if tax has been deducted, probably not. I have never declared them, either in UK or in Japan where I live. I honestly never thought about it, mostly I just let it accrue. It went up and down over the years and I can't honestly say with any conviction whether I have made a profit or a loss on the total invested.
Am I likely to encounter problems if I send the money back to Britain to buy a house? have I done anything illegal by not declaring it over the years?
Submitted: 11 months ago.
Category: Tax
Customer: replied 11 months ago.
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Expert:  bigduckontax replied 11 months ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Firstly, when you moved to Japan all those years ago did you complete a Form P85 and send it to the Inland Revenue as it was then? If you did not you should do so immediately, fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. On receipt HMRC will classify you as non resident. You will find dealing with that Department much easier if you do. When you transfer funds to the UK warn your bank of incoming moneys and their source to preclude any money laundering inquiry a large transfer might attract. As a permanent resident in Japan you pay income tax on your world wide income, just like you would were you resident in the UK. Here is the advice from Takenaga, Hashizu, Jay & Co, Certified Public Accountants regarding mutual funds: 'You must generally report as income any mutual fund distributions, whether or not they are reinvested.' You may need to make your peace with the Japanese taxation authorities. As far as I am aware The Mikado's great decree made flirting the only offence punishable by beheading [Gilbert and Sullivan] so you should keep your head! I do hope that you have found my reply of assistance.
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Customer: replied 11 months ago.
hello Keith, thanks for your reply.
So can I take it that as I'm not a resident of UK anymore, though I still have a British passport, they won't be concerned at their end whether I have paid tax in Japan or not? Will their main concern be a suspicion of money laundering? The solicitor doing my conveyancing has asked me for lots of documents, payslips, tax records from Japan, historical records of my buying the mutual funds none of which I have. I've either thrown them away years ago or lost all track of them when I changed computers etc.
Also, for a matter like this the British won't inform the Japanese authorities will they?
Expert:  bigduckontax replied 11 months ago.
No, not at all, as a non resident you are not liable to UK taxation, save if you rented out your UK residence. Please remember, however, to submit the P85. The only possible concern would be money laundering which, as you are probably aware is rife which is why you should warn off your UK bank. I trust that when you renewed your UK passport you received the correct one. I recall a colleague of mine who arrived back in Heathrow after a secondment to the Malaysian Armed Forces to be told by Immigration that he had no right of entry to the UK. His passport had been incorrectly renewed by the Embassy in KL. He protested that this was utterly crazy as he has been a British Army Officer for a quarter of a century so they let him in, but warned him that he had to sort out the situation. Relatively simple you might think except that he had a German father and a French mother. Either of these countries would give him their nationality immediately; the UK no. He finished up having to naturalise as a Brit. Then he went an married a Dutch lady! This was in the days before we were members of the EU. I consider it very unlikely that the UK will contact Japan over such incoming moneys. Thank you for your support.
Customer: replied 11 months ago.
hello Keith, I have submitted a P85 twenty years ago so they know I live abroad.
I'm still worried that my house purchase will not go through because of delays due to me not having evidence of my original earnings for the funds years ago. Are my worries justified? Is there anything I can do to satisfy the conveyancer? best regards
Expert:  bigduckontax replied 11 months ago.
With respect, totally unjustified; there should be no problem with the transfer of funds. This sort of transaction happens every minute in international trading.

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