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Sam, Accountant
Category: Tax
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I have a couple of questions regarding overseas income as I

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I have a couple of questions regarding overseas income as I am unable to find a proper answer. I came to UK as student in 2005 and became Permanent UK resident in 2014 (via applying for permanent residency) and currently have a joint savings account with my wife in India since 2015. The principle and interest is reinvested as deposits in my joint savings account every year. I topup my savings account from my UK account so the source for the deposits can be my account in UK. I had other Indian bank accounts since 2007 but those were closed a couple of years back and I hold no records for them. To put it simply I didn't pay proper attention and was negligent to what comes in and goes out of my accounts in India. I was thinking there is no need to pay tax as it is non UK account and I am not UK citizen. After reading HMRC site and emailing HMRC I came to know that tax needs to be paid and was asked to disclose via Worldwide Disclosure Facility. I would like some advice on what I should do here as I don't have records for closed accounts and can produce evidence for open accounts while filling the form from HMRC.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly


Thanks for your patience

How much income do you earn from these savings abroad each year? (your half share)

In 2007 how much time did you spend in the UK - and how often did you visit out of the UK (with dates would be useful)

When did you leave the UK (after this period of being a student) and when you did you return back to the UK to live and work and what are your plans for the foreseeable future as to you remaining in the UK

Also how much income did you earn approximately from the 2007 accounts and are not able to ask the company with whom you had these savings with for details of income earned ?

Do these new savings account ONLY have money that you send from the UK in it as capital ? Does you wife contribute any capital to these accounts - and do you ever spend any in the UK directly from this account OR transfer back from these accounts to the UK?

I can then advsie whether there is anything to declare



Customer: replied 5 months ago.
Hi Sam,Thank you for the response.Since 2005 till present date, I have been to India for 30 days or less and I never left UK permanently. Since 2007 I have been sending money from my UK bank account which I had with Barclays at that time via western union to Citi bank account in India. I didn't earn any interest as the amount sent was used for maintenance purposes if I remember it correctly. I don't have any statements as I sent money occasionally and didn't use the account much. I opened another bank account with Indian Overseas bank which I held from 2013 to 2016. This was a joint account with my mom and the deposits were opened under both our names. The interest earned for the years 2014,2015 and 2016 are £3300, £4000 and £4300 which are rough estimates. I opened another joint bank account with my wife at State bank of India since 2015 till present. The interest earned during the years 2016, 2017 are £625 and £5600. All the interest earned are yearly from deposit accounts in the banks. My wife doesn't work and so does my mom. My wife contributed to these accounts in India since she started working from 2012. I normally transferred money to India via third party services from my solo UK account or through joint account which I have with my wife.No money is remitted back to the UK from India. The interest earned is mostly renewed along with the principle amount every year and we use some for maintenance while visiting India.I have no issues disclosing anything to HMRC. The problem is proof which I don't have for Citibank. Some deposits were opened by my mom in India by visiting the branch for Indian overseas bank which I have no proof to show but know the numbers and interest earned. Citibank and Indian Overseas bank accounts were closed two years back. The only account I have open in India is currently with my wife at State Bank of India. HMRC wants everyone to disclose accurate information. My situation is that if I submit accurate information without proof I can be questioned. If I don't submit I can be still questioned. It's like I will be damned if I do damned if I don't.My question at this point is whether it is enough to submit the tax returns for the years which I have proof for so when HMRC questions I can show. Would HMRC query closed accounts 2 years ago or would they normally look for any opened accounts under my name with banks in case if they love to make my life miserable after I file my tax returns for the missed years.Thanks

Hi Karthik

Thanks for your response

Then you have been resident in the UK since 2005 and should have either declared this income under the arising basis or considered the remittance basis which is permitted for Non UK citizens who are treated as not domiciled in the UK

Had the income earned been less than £2000 a year then there would not have been a need to declare it - but as this is in excess or close to, most years so then your share needed to be declared

For the first 7 (of the first 9 years) you could have claimed the remittance basis which would mean that this foreign income was not taken into account but this would have seen a loss of UK personal allowance (on which the tax you would suffer would be greater than that due on the income itself) but after 7 out of the first 9 years a remittance charge (as well as loss of personal allowances comes into play - which is £30,000 a year then from 12 of the last 14 years an annual charge of £60,000 s clearly there is a time when you should declare this foreign income

And the above is on the basis that you did not remit the money back into the UK (even though its originating source was from the UK)

You will need to get on touch with Citibank as these earlier years are crucial to your disclosure and the same applies to the Indian Overseas account because if your share is less than £2000 then there is no need to declare these earlier years at all - but you need to be sure this is the case rather than just assume so - they are fully able to backdate providing information for up to 7 years and you just need the equivalent of a certificate of interest paid

If you ONLY submit the latter figures HMRC will open a full enquiry up which will prove costly in tax penalties and interest and this is made quite clear of the need to disclose - see here from HMRCs website

This isn't about making your life miserable (despite how I appreciate i must feel) its about you having not been declaring your worldwide income at the appropriate time and all being well - if less than the £2000 then you can forgo those earlier years and just disclose the 2015 2016 and 2017 figures (which with the two accounts added together for your share, do exceed £2000 and also make sure that you do continue to make a full declaration via self assessment from 2018 onward

Let me know if I can assist further



Customer: replied 5 months ago.
Hi Sam,Thanks again.I wished I had my papers with me for the closed accounts or knew the rules earlier to have taken proper steps at the time. The best I can do is to check with the banks if they still hold any statements with regards ***** ***** closed accounts. If they do then it's all well and good. If they don't then I can't prove it and so can't HMRC in that case right by checking with banks or asking me?I checked with my mom with regards ***** ***** Indian Overseas Bank as I closed the account with her. We had to return the bank passbook and sign the accounts closure form. They never gave any receipts back and it is formally the case as it runs on old system. I have asked if my mom can visit the bank and enquire for a full statement for the years the account was open or atleast the photocopy of the bank passbook which had the entires for the transactions. I think that should be suffice for proof.When I calculate the figures for every year how do I take the currency conversion rates into consideration as it fluctuates throughout the year?I had two bank accounts which was in my name in India which was closed after a few months of opening as I didn't need it. I don't even remember the account name. Will this be a problem for me and do I have to chase those banks for statements eventhough I had nothing in those accounts?Sorry to ask too many questions.Thanks

Hi Karthik

Thanks for your response and you are welcome to ask as many question as you need to move forward with supplying HMRC with the information they need

If you cannot provide evidence then you will have to accept what figures HMRC hold as they will have evidence or they would not be asking you to make this disclosure

So you have to chase ALL bank account details IF you had any capital in them and interest was paid on that capital, no matter how short a time you had them or with whom they were held.

If you really do exhaust getting copies of amounts then you will just need to declare the account as existing and estimate the figure you believe to be the income earned - advise with whom the account was held and how much was your share - that way you are at least still making a full disclosure even if you cannot firm up the figures - but this option has to be as a last resort rather than not bother trying to get the information you need.

Re currency conversions you apply it at the relevant time - there is a link here that supplies exchange rates (used usually bu Customs and Excise and VAT but also used or tax purposes) so establish the right date that interest was paid and make the conversion with the dates exchange rate

Let em know if I Can assist further, or, if you have all that you need, it would be appreciated if you could rate me for the level of service I have provided (or click accept)



Customer: replied 5 months ago.
Hi Sam,Thanks again.I am coming forward voluntarily to make the disclosure willingly as I read on the HMRC website that I have to declare income outside the UK. So I opened a case via the online disclosure facility and waiting for HMRC to send me a form which I have to fill in within 90 days. I received no letter from them to disclose my accounts.The problem is too many sole and joint bank accounts (open/closed) in India and trying to trace them by sitting in the UK and waiting for the reply from banks. Some banks run on old systems and I would not be surprised to receive funny answers from customer services related to my account.As you suggested I will contact every bank and query for statements. I am doing this via email as I am in the UK and have a fair reason for unable to do from India. If banks can provide me with the statements thats good. If they can't, then I will have proof in the email stating the same which I believe I can disclose with HMRC stating that's the best information I can provide in this situation.Since it is a joint account (Indian overseas bank and State Bank of India), I believe I would be accounted for half of the interest accumulated in those accounts right no matter how the source for the deposits were supplied?Thanks


Then this is even better but just as essential that you do declare everything as accurately as you can and where you struggle to provide accurate figures just make sure you state that is the case (as that os just as important if were you really cannot track down the full information)

The proportion of interest treated as yours will be reflected by the proportion of capital in the account that is yours, with accounts held other than with a spouse, so say you had £100,000 in an account tat paid £3000 interest - but the account was made up of £70000 that you had deposited/saved then, 70% of the interest would be yours £2100 not half of it

Half share only applies with husbands and wifes in joint named accounts, so you will have to review those held with your Mum accordingly



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Customer: replied 5 months ago.
Hi Sam,Thanks a lot for the responses.Appreciate the assistance you have offered.Thanks