Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Mon, 05 Sep 2022 22:09:22 GMT by San CA
I have recently become a tax resident of UK and I will be filing my returns under the Tax Resident Non domicile status remittance basis. I understand that any savings prior to becoming a tax resident in the UK are not taxable upon remittance to the UK. My specific query is about is about bank fixed deposits in my overseas country which we made before I became a tax resident in the UK. I understand that this principle amount is not taxable upon remittance to the UK (since these are my original savings). However a lot of these deposits will mature only in 2024 - 26. My overseas bank has suggested that they can transfer the principle (original amount) to a completely new bank account (clean fund ) receiving only amounts that were my savings before I became a tax resident. The interest will continue to be credited to my existing savings account (mixed funds). This will allow my to segregate my old savings from the new interest earned from the deposits. I intent to remit the original savings (principle amount) back to the UK and I understand that these will not be taxed since there are my old savings before I become a tax resident. My question is what documents will I need to provide to HMRC upon remittance in 2024 to prove that these funds are from my original savings? I will not be remitting any interest earned from these deposits after 5th April 2022. Thanks
Posted Thu, 08 Sep 2022 13:56:19 GMT by HMRC Admin 25
Hi San CA,

Generally speaking, there is no tax liability arising for the transfer of your own existing assets to yourself in the UK.  

However, if that money arises from income such as wages if you work abroad, foreign investment income.

For example dividends and savings interest, rental income on overseas property, income from pensions held overseas.  

Foreign income is anything from outside England, Scotland, Wales and Northern Ireland.

The Channel Islands and the Isle of Man are classed as foreign, are likely to be taxable.

Thank you. 

 
Posted Fri, 09 Sep 2022 09:42:53 GMT by San CA
Thank you for your response. My query was specifically in context of my intention to file as a non domicile tax payer under the REMITTANCE BASIS. I understand that any remittance into the UK is liable to UK tax except old previous savings / assets that were owned prior to becoming a tax resident. I am also aware that interest or income arising from these assets after becoming a tax resident are taxable upon remittance into the UK However my query was regarding my old savings which I owned prior to becoming a tax resident in the UK. A lot of these are in the form of bank deposits which will mature only in 2023 or 24 which I want to remit to UK after they mature. I understand that since these are old savings these will not be liable to tax upon remittance into the UK in the future (say 2023 or 2024). My question is how to I ensure that these funds remain isolated? My bank can arrange to transfer the principle amount to a new bank account that these funds remain clean while any interest arising from these deposits can be transferred to an existing bank account (mixed funds). Please confirm if my understanding is correct. And if so what kind of documentation or evidence will I need to provide to HMRC to prove that these are old savings prior to becoming a tax resident in the UK?
Posted Mon, 12 Sep 2022 14:12:41 GMT by HMRC Admin 17

Hi,
 
I can confirm that, on the basis of the information you have provided, your understanding of the Remittance Basis is correct. 

As regards what records/documentary evidence HMRC would expect you to keep, please refer to: 

Keeping your pay and tax records   .

Thank you.

You must be signed in to post in this forum.