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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am currently living and working in India . I have never

Customer Question

I am currently living and working in India . I have never worked or lived or resident in UK ( No income in UK, No ties with UK).
I am planning to move to UK for a longer term (as my company transfers my job from India to London) on Jan1 2017
Key question:
1. If I transfer my current savings in India to UK after I arrive in UK, Is that remittance in Taxable? (transfer will be through normal banking channels)
2. The savings may be transferred in after 1 year post arrival in UK, since this remittance in is planned to buy a property, ( to be found) Will that time period of 1 year stay in UK during remittance create any issue?
3.Any money held in Jersey/Isle of Man in offshore accounts are having same treatment or different?
4. How to avoid problems if any in any of the above
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.

Hi.

1 Savings accrued before you come to the UK and transferred to the UK won't be taxable in the UK. You need to separate or be able to identify cash and assets you held before you come to the UK so that only any income and gains you make after you arrive in the UK are taxable in the UK if you bring them into the UK and choose to use the remittance basis of assessment.

2 No particular issues arise. See 1 above.

3 Income and gains from Jersey and Isle of Man are treated as offshore income for UK tax purposes as would income and gains from India or other countries.

4 Keep good records. See 1 above on separating or being able to identify capital held before you come to the UK. The identification of income and gains for the purposes of the remittance basis rules are complex.

Take a look at section 9 of RDR1 here for information on the remittance basis of assessment.

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

Customer: replied 10 months ago.
On your answer- "Savings accrued before you come to the UK and transferred to the UK won't be taxable in the UK. You need to separate or be able to identify cash and assets you held before you come to the UK so that only any income and gains you make after you arrive in the UK are taxable in the UK if you bring them into the UK and choose to use the remittance basis of assessment.- " IN THIS SENTENCE , Accrual concept is clear, accrued before is non taxable, However can you clarify second sentence more, How practically the second sentence to be proved, separate assets and prove the remitted money is not after coming to UK, currently the amounts are in bank deposits, does that deposit receipts sufficient?
Expert:  TonyTax replied 10 months ago.

When I say "accrued", I mean, actually sitting in your bank. Realised income would be a better description.

I'm afraid that the record keeping and onus of proof is up to you. If asked by HMRC, you will need to prove that any money you bring into the UK which you claim you had before you arrived was in fact money you had before you arrived. That may mean producing bank statements. I know of people who moved cash held before they came to the UK to a different bank account or put post arrival income in a separate account.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 10 months ago.
is it right to assume - No tax on money in bank account before coming to UK, carry all bank statements, ( no credit in bank statements after arrival in uK) and also These needs to be declared "only if asked ".
Expert:  TonyTax replied 10 months ago.

The cash you have outside the UK immediately before your arrival in the UK can be brought into the UK tax free. You could also liquidate assets such as shares and property before you come to the UK free of UK tax (but local taxes may apply).

If for any one tax year, you have non-UK income you have not brought into the UK of £2,000 or more and you wish to use the remittance basis of assessment whereby you only pay UK tax non UK income you bring into the UK you have to make a claim for such treatment. See section 9 of RDR1.

Customer: replied 10 months ago.
is it correct to understand-
remittance basis applied for "Income only"- accrued after coming to UK
For Cash already in bank ( income earned before coming to UK)- remittance basis is not relevant as it is already tax free being not income but a remittance of asset.
Expert:  TonyTax replied 10 months ago.

The RB applies to income and capital gains.

Cash held abroad before arrival in the UK can be brought to the UK tax free.

If you own shares or property or other assets which are showing gains and you sell those after you arrive in the UK, the gains will be taxable in the UK if you don't use the remittance basis and instead choose to pay UK tax on your worldwide income.

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