Tax on transferring money from EURO to GBP Bank Account

[ping1971]

Hello,

I worked in Holland 4 years ago and got paid in Euros into a European bank account (based in Holland) and this was taxed by the dutch government at the time.

Since then it has sat there earning interest till I now want to bring it back to the UK to fund a house purchase.

Is there anything I need to know about the tax implications of doing this (I'm assuming there should be none due to it already being taxed at source and double taxation treaty with Holland) but just wanted to check due to the amount in question (about 90k in Euros) and the time since it was earned (about 4/5 years).

Regards,

Paul.

[maths]

I assume you are UK domiciled (broadly, British).

At the dates any interest has been credited such amounts should be converted into sterling and shown on your tax return; any Dutch tax thereon could be used to offset any UK charge.

If the euros are transferred from Holland to a euro bank account in the UK, no UK tax arises at that time. If the euros are transferred into a £ bank account in the UK a possible CGT charge arises.

To calculate the CGT charge requires a conversion of the euros to £ at the date of transfer and a conversion of the euros into £ at the dates they were originally credited to the account (taking say average rates for the year); the sterling difference represents the UK capital gain (or loss). I suspect there will be no equivalent Dutch tax to offset the UK CGT (if any).

[jason13]

How would the situation change if he were not UK domiciled?

Let's take the following example: a European citizen (not UK) lives and works in their country of origin for 30 years and then moves to the UK permanently (i.e. becomes a resident but is not UK domiciled). A year later, they want to transfer money (savings from previous work) from their EUR bank account in their country of origin to a GBP account in the UK as well as sell some shares that are held in EUR in their country of origin.

How would CGT be calculated in this case?

Would the situation change if that person had previously studied in the UK for 3-4 years without any intentions of staying there (and in fact moved back to their country of origin after completing the studies)?

[maths]

The difference between a UK dom and a non-UK dom is that the former can transfer a particular foreign currency from a non-UK bank account to the same denominated foreign currency bank account in the UK (and vice versa) without at that time precipitating any CGT charge.

If the above is effected by a non-dom a CGT charge is precipitated.

Re your query, the foreign currency is converted into £ at date of transfer and the amount in the account is converted into £ as and when credited to it (the difference in £ potentially subject to CGT); although due to practical problems re ascertaining the £ cost of the monies in the account averages are permitted.