Declaration of overseas saving interest

Do I need to declare overseas saving interest when the total interest income is less than GPB 1000?

Hi Skinny,
Any foreign income, no matter how much or little, must be reported in a Self Assessment Tax return. 
Add your foreign interest to your UK interst and follow the guidance here:
Tax on savings interest
Thank you. 

Hi, continue to follow the above question. If I choose the remittance basis for taxation, and my only income in the financial year is the overseas interest income, do I need to declare the overseas interest income if this interest is not remitted to UK yet in the financial year?

Hi Skinny,

Yes.  
Any foreign income not remitted to the UK, must be declared on SA109, on page RR3 in boxes 34, 35 and 40, which will require the completion of a self assessment tax return. 
If you chose the remittance basis, then you lose your personal allowance / capital gains allowance and will be taxed on all your UK income and any remitted foreign income.  
If you are resident in the UK for 7 of the last 9 years, a charge of £30000.00 applies.  
If you are resident in the UK for 12 of the last 14 years, a charge of £60000.00 applies.  
These charges will be added to your taxable income and tax charged on the total.
Have a look at the guidance at section 9 of RDR1 Guidance note for residence, domicile and the remittance basis: RDR1.

Thank you.

 

Hi, Thanks you for all the above replies. Further questions. 1.Since the foreign interest is in foreign currency, i need to change that to GBP. The declared amount (GBP) is as follows: total interest multiply the yearly average exchange rate. Am I right? 2. I know that the gain from selling of overseas property is also needed to declare and regard as capital gain. There is also an foreign exchange question I would like to clarify. Suppose I bought a overseas property in 1993 before immigrated to UK. Now I am living in UK and will sell the overseas property. I suppose that the cost of the property in 1993 is HKD100,000. Now I sell it at HKD400,000. If I want to declare this for taxation, there are two ways to calculate the profit in GBP. Calculation 1: change the 1993 HKD100,000 to GBP at the rate in 1993, and then change the present price HKD400,000 to GBP at present rate, then do the subtraction to calculate the GBP profit. Calculation 2: Do the subtraction first in HKD, then the profit is HKD300,000. Then change this HKD300,000 to GBP at present exchange rate and declare this amount for taxation. I would like to clarify which calculation method I should use for the tax declaration. Or both also ok?

Hi Skinny,

In answer to your questions.

1. yes that is correct.  
2. you need to use the rate for the 1993 purchase price to convert to sterling and the same for selling price now, the difference is then your gain in sterling.

Thank you.

Thanks for your reply. I would like to know where I can find the FX rate for 1993. Using average rate? daily rate?

Hi Skinny,

Please refer to:  Exchange rates from HMRC in CSV and XML format

Thank you.

Hi, Thank you for your reply. However, there is no file for 1993 FX. Skinny

Hi,

You can see information here:

Foreign exchange rates and spot rates: 1 January 1989 to 31 March 2014

Thank you.

Hi, 1. Refer to the above FX rate from 1 Jan 1989 to 31 Mar 2014, My overseas property was bought at 29/4/1993 before immigrated to UK. Which rate should I use to calculate the equivalent GBP to calculate the cost of purchase? Named "31.03.93", "Spot rate 31.03.93", "31.12.93", or "Spot rate 31.12.93"? 2. Now I am living in UK and my overseas property was sold. Suppose the selling price is HKD3,000,000. The complete deal date will be on 10 Apr 2024. But the buyer will pay me by three payments. He has paid two funds within this financial year (2023/24). At 1/2/2024, he paid HKD40000. Second payment was HKD60000 on 17/2/2024. And he will pay the final remaining payment on 9 Apr 2024. There are two questions raised. a) I know from your answer above that I have to do the FX to change the HKD to GBP. I have to use Feb 2024 monthly exchange rate to calculate the GBP? b) In reporting the capital gain tax, the first and second payment are in financial year 2023/24, But the final remaining payment will be on 9 Apr 2024, which is out of the 2023/24 financial year. How should I deal with this? Sum up all these as the selling price and report in 2023/24? or report the sum in 2024/25? Or treat it in other way? Thank you.

Hi,

The capital gains liability arises in the tax year in which the completion date of the disposal occurs, even if part of the disposal is paid in an earlier tax year.  
The calculation is based on the disposal value minus allowable costs.  
The gain should be declared on SA108 (Capital Gains) and SA108 (Foreign) along with SA100 (tax return) so that you can claim a credit of up to 100% of the capital gains tax paid in Hong Kong.

Thank you.

Hi, Thanks for your answer. I have further questions. 1. My overseas property was bought at 29/4/1993 before immigrated to UK. There are 4 excel file with different titles in the link https://webarchive.nationalarchives.gov.uk/ukgwa/20141203183220/http://www.hmrc.gov.uk/exrate/index.htm: Named "31.03.93", "Spot rate 31.03.93", "31.12.93", or "Spot rate 31.12.93". Which rate should I use to calculate the equivalent GBP to calculate the cost of purchase? 2. I do not have to report or pay the CGT within 30 days or 60 days as it is not a UK property sale and 3. I report on my self-assessment tax return for the financial year 2024/25 and pay the tax according to that. Are my understandings correct? Thank you very much

Hi,
1. You can use  the rates specified for the tax year in which you bought/sold  
2. As its not a UK residential property you dont need to report and pay within 60 days  
3. That is correct
Thank you.

Hi, Following the disposal of the my major living property in HK described above, 1. There is no capital gain tax in HK. Therefore I only need to declare the profit should declare the profit as capital gain in SA108? 2. In order to claim the private residence relief, I need to show this clearly in my calculation of the profit in the blank box 54 in SA108? Thank you.

Dear HMRC team, I have another question about my mother. My mother has had a Cash value life insurance for a long time in Hong kong. She has terminated the insurance in Aug last year, and get back the cash surrender value in HKD. I know that she needs to declare this value on SA106 as foreign chargeable event gains. 1. Should I fill in the value in box 43? 2. We got no "chargeable event certificate" in Hong Kong or UK. Should I mention this in the SA100 TR7? In addition, 3. What is the meaning of "Number of Year" in box 44? Is it the number of years between the buying of the insurance and the surrender year? What is the meaning of "tax treated as paid" in box 45 blank? Thank you for your attention.

Hi Skinny,

Although there is no capital gain arising in Hong Kong, you need to work out if there is a capital gain in the UK.  
If the property was your main residence for the whole period of ownership, private residence will cover all of the gain, so no UK capital gais liability.  
The 3 character code for private residence releif is 'PRR' in box 8 of SA108. Boxes 52.1 to 52.5 of SA108 are for individuals who are not resident in the UK, but have disposed of a UK property. You would only complete boxes 1 to 13 of SA108.

Thank you.

Hi Skinny

SA106  
1.  The amount of the Chargeable Event should be entered at box.43.  
2.  If no Certifcate was received, you can mention this at Page 7 in the SA100.  
3.  The number of years represents the number of years the policy was in force.  
4.  This represents the tax paid on the Chargeable Event - as a Foreign Chargeable Event, it is likely that this entry would be NIL.  
Please also refer to the following further Guidance - HS321 Gains on foreign life insurance policies (2024) and Foreign notes (2023-24)

Thank you