Bringing Money into UK from Australia

[rockypunting]

I am currently an Australian resident for tax purposes, looking to move to the UK for a minimum of three years with my company. How much tax would payable on appoximately $100K or GBP40,000 transferred to the UK.

This money is pure capital (savings) that I have accumulated to date.

[TaxationWeb@BritishA]

If you transfer the capital *prior* to your move, there will be *zero* tax on the transfer. If you transfer after you become resident in the UK, the tax could be very complicated.

The UK taxes residents on a remittance basis. If you bring money to the UK after you become resident, you are taxed on any earnings that have accumulated within that account.

So for example, if your UK residency starts 1 Jan 2007, you sell a bunch of stocks & shares you've been holding on 2 Jan 2007, and then bring the money here on 3 Jan 2007, you will pay tax on all the capital gains. Similarly, if you move on 1 Jan 2007, sell a bunch of stocks & shares you've been holding on 2 Jan 2007, and then bring the money here on 3 Jan 2010, then in 2010 you will pay UK tax on all the capital gains incurred in 2007. They kindly allow a tax credit for any Australian tax you pay to offset the UK tax, but it may not be sufficient to fully offset the UK tax.

If you bring the money before you're resident, there won't be any remittance tax. So it's best to set up your personal bank account here now, before you arrive.

If the process of liquidating this money to bring to the UK will trigger Australian tax of any kind, you should seek expert dual UK/Australian advice to see which, if any, of the loopholes out of this tax you might be able to squeeze through.

One of the tricky questions is, of course, "As of what date do you become a UK resident?" and "Am I a temporary resident (Resident But Not Ordinarily Resident) or a longer-term resident (Ordinarily Resident)"? While the answers to these questions are another big kettle of fish too big to go into here, they obviously impact greatly on the date you bring the money.

Your company should pay for your tax advice and tax preparation as part of your move. If you are the only person from your company on assignment here, this will be new to them. But if you're one of many, they'll have a whole system set up already. Check into this before you shell out your own cash on an advisor.

[tax me less!]

TaxationWeb's solution is only partly complete.

1. You will only be able to escape UK tax if (and only if) you can claim the split-year concession.
2. You may be subject to UK tax on foreign currency gains.
3. We do not know what instruments you hold your capital. If pure cash, UK planning will be relatively straightforward.
4. Why do you need such a large lump of cash now? It can be much more tax-efficient to move the money to an offshore account.