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bigduckontax, Accountant
Category: Tax
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, I need to know whether or not me and my spouse have

Customer Question

I need to know whether or not me and my spouse have to register for self-assessment, and how to make sure my savings brought from abroad will not be taxed.
- I moved to UK on Oct 30th, 2014 on Tier 1 Investor visa
- My wife moved on Dec 15th
- I have brought cash with me and deposited in the bank (dec-feb)
- I am currently self-employed. Started a company but we have not started working yet. (only paperwork done)
- Invested in Tier 1 Visa compliant investment portfolio throughout Jan 2015 (UK stocks & bonds)
1- Do I and my spouse need to register for self-assesment ?
2- I understand that since the savings that have been transfered to UK banks have been earned before becoming a resident are not taxable. Is this correct ?
3- Is my status "resident non-domiciled" ?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
You only need to self assess if you are in receipt of income which has not been taxed at source. Most UK deposit takers deduct tax at the basic rate of 20%. However, HMRC may require you to self assess and if they so do you must comply.
On arrival in the UK, if you notify HMRC of your presence and date of arrival, you will be registered as resident for the tax year [6 April - 5 April] following your arrival and, in addition, the year of arrival will be split into two portions, one non resident and one resident. As a result HMRC will almost certainly ask you to self assess, at least in your early years here. As a result of the split you will not be subject to UK taxation on interest earned before your date of arrival and in any event any tax paid to your home country would be allowable as a tax credit against any UK tax liability on the same income stream with any country with a Double Taxation Treaty with the UK.
It sounds as though you may well be classed by HMRC resident, non domiciled. Domicile is a complex subject, basically being dependent on the country you consider to be your home and to which you will ultimately return. The savings you bring in will be outside UK taxation, but once they begin to yield income then that will, of course, be subject to UK Income Tax. If the sums are substantial it is always adviseable to inform your bank of their source and arrival to preclude money laundering inquiries.
I do hope I have thrown some light on your position. Welcome to UK taxation!
Customer: replied 3 years ago.
I was under the impression that I would NOT be taxed on income earned abroad PRIOR to my becoming a citizen.
All my savings have been earned prior to this.
Expert:  bigduckontax replied 3 years ago.
With respect this is exactly what I told you in my answer viz:
'As a result of the split you will not be subject to UK taxation on interest earned before your date of arrival'
Once you are classed as resident in the UK here is the advice from Mondaq on Tier 1 investment visas and UK taxation:
'Remittance Basis of Taxation
Non-domiciled individuals resident in the UK may choose, on an annual basis, to be taxed on the "remittance basis".
Domicile is a distinct and separate concept from residence. A person's domicile is generally (though not exclusively) determined by place of birth; an individual is normally deemed to have inherited their father's domicile, known as a "domicile of origin".
The remittance basis of tax restricts the UK tax liability to UK source income and gains, plus any non-UK source income and gains brought into (remitted) to the UK. Thus, any non-UK income and gains retained outside the UK (for instance in an offshore bank account) will not be taxed. This is a major tax incentive for those with significant sources of income outside the UK. Depending on the duration of residence there may be an annual charge to access this basis of taxation; however, this is often not material when compared with overall tax savings.
Many UK resident non-domiciled individuals will wish to bring some non-UK income into the UK in order to fund their lifestyle and / or purchase property. With careful planning, the UK tax on such sums can be reduced or eliminated. In particular, from April 2012 funds remitted to the UK for investment in a UK commercial business will be exempt from tax'
Here is the advice of London and Capital on what must be done with moneys brought into the UK on the Tier 1 Investment Visa:
'The funds then need to be transferred to a custodian/wealth manager for investment in suitable strategies within 90 days, providing a statement of all transactions. The funds must only be invested in UK gilts, UK bonds and UK equities (property and cash are now excluded). This can wrong-foot many applicants. Any reputable investment firm will need to follow clear and detailed due diligence procedures prior to investing on a client’s behalf.'
Your impression would appear to be substantially correct.