Bringing funds from overseas to UK

[rich017]

Hello, I am a sole trader/freelancer and I have lived and been domiciled permanently outside the UK for 8 years and am planning to return to the UK and transfer my savings earned abroad across to a UK bank account upon my return.

Would I be liable for any Capital Gains Tax or any other taxation on the money I transfer?

I don't understand what Remittance base tax is, could anyone please explain what this is in simple terms and would this apply to myself?

Thank you.

[AmanSood]

The remittance basis tax only applies in the year you are UK tax resident. So in your case, assuming the income you plan to bring into the UK was all earned whilst you were non-UK tax resident (which would be the case if as you say you have been working overseas fulltime for the last 8 years) then there should be no UK tax to pay on the funds you bring in. Care needs to be taken if during the 8yrs you were actually spending some time working in the UK as this may be deemed to be UK sourced income and therefore taxable in the UK. Also, consideration needs to be given if you plan to retain overseas assets/investments and what the UK tax implications would be once you return to the UK and become UK tax resident.

[rich017]

Thank you AmanSood for your reply.

If after we decide to return to the UK and be fully domiciled there is a possibility that I may leave some funds in a bank account overseas, these are just funds and not investments or assets. If i decided at a later date that I would like to transfer the remainder back to the UK would there be any remittance based taxation to be applied upon those additional funds? Or is it better to declare those funds at the same time as we move back to the UK?

[maths]

What makes you think that for UK tax purposes your are not domiciled within the UK?

[AmanSood]

Thank you AmanSood for your reply.

If after we decide to return to the UK and be fully domiciled there is a possibility that I may leave some funds in a bank account overseas, these are just funds and not investments or assets. If i decided at a later date that I would like to transfer the remainder back to the UK would there be any remittance based taxation to be applied upon those additional funds? Or is it better to declare those funds at the same time as we move back to the UK?

Rich017 - it's definitely cleaner to bring all your funds to the UK in one go and limit any need to have any funds sitting overseas. If however you decide that you want to keep some funds overseas and bring this into the UK at a later date, then this is ok as well. Just keep in mind that any income that your funds overseas may be earning e.g. interest, dividends etc would potentially need to be declared and taxed in the UK (unless of course you can claim the remittance basis but this may not be the most tax efficient approach for you).

[bd6759]

Ignore the remittance basis. It only aplies to those who are not domiciled somewhere in the British Isles. Domicile has a specific measning: it does not simply mean the place where you live. You are (generally and without going into all the permutations) domiciled in the place where you are born and you retain that domicile throughout your life unless by action and deed you acquire a domicile elsewhere. Changing domicile requires more than changing your address. As you are returning to the UK after only an 8 year absence with no real intentions about your future, you are very likely to have retained your originsl domicile throughout that period.

You can keep as much or as little assets offshore. Just remember to declare your income from those assets on your UK tax return,

[maths]

It only applies to those who are not domiciled somewhere in the British Isles.

No, not the "British Isles", but the United Kingdom.

As you are returning to the UK after only an 8 year absence with no real intentions about your future, you are very likely to have retained your originsl domicile throughout that period.

You are implicitly assuming that prior to leaving the UK, the poster was domiciled within the UK [not an unreasonable assumption, but not necessarily correct].

[bd6759]

Technically, not the UK either but in England, Wales, Scotland or Northern Ireland. But that is splitting hairs.

Yes. I have made a big assumption about his domicile.

[maths]

Not according to ITA 2007 s 809B(1)(b) !