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Where Taxpayers and Advisers Meet

Cleansing Income/Capital

Yiannis17
Posts: 67
Joined: Wed Aug 06, 2008 3:43 pm

Cleansing Income/Capital

Postby Yiannis17 » Thu Jun 27, 2019 9:56 am

Morning

Once an individual is in the UK, who is UK resident, but Not UK Dom, is it difficult to prove that monies brought in from Europe is capital? I have a chap who has transferred 30K in some time after arriving.

And what would the position be with his tax return?

Thank you

AGoodman
Posts: 852
Joined: Fri May 16, 2014 3:47 pm

Re: Cleansing Income/Capital

Postby AGoodman » Thu Jun 27, 2019 10:47 am

Do you mean the client is unsure himself or how do you prove it to HMRC? It is all fact specific so difficult to be generic.

hendersontax
Posts: 26
Joined: Wed Jun 19, 2019 5:04 pm
Location: Manchester
Contact:

Re: Cleansing Income/Capital

Postby hendersontax » Tue Jul 02, 2019 11:28 am

The individual will need to self-assess whether or not he has made a taxable remittance, there is no need to prove it unless HMRC open an enquiry. If the money was transferred from a bank account which was not a mixed fund and contained nothing other than pre-arrival capital (for example, at the point of remittance the account was 'clean' and had never been credited with income or gains taxable on remittance, such as interest earned after arrival) then there should be no tax implications of the transfer and no need to declare it. Otherwise, if the account was a mixed fund, there are strict rules which deem what income or gains has been remitted first - see https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm35240.


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