Moving to UK and a UK Bank Account

[ssafridi]

Mr. A opened an "International Bank Account" in UK 3 years before he decided to move to UK. Now, Mr. A is in the UK and the account is still there. From day one the Account is receiving dividend from a portfolio (fund) in Dubai. When Mr. A came to UK, he opened another bank account for payroll and day to day use. He is here now for almost 1 year (having only PAYEE) and the International Account is also here (still active and receiving dividends) but he has not withdrawn and used any money form it in the UK. If Mr. A opens an offshore account for example in Isle of Man and transfer all the Funds will it be OK or he has to declare this account and the dividend income to HMRC for the duration both him and the account were here in the UK? What are the options please?

[AGoodman]

Yes, he would definitely need to declare the income he received while he was resident. There is no real point moving that money offshore, it makes no difference now.

The position won't necessarily be any different if the dividends are paid to an offshore account as, by default, Mr A is liable to tax on his worldwide income.

He could elect to be taxed on the remittance basis but - he has to file a return to do this, he would lose his personal allowance and CGT annual exemption, he can't then use the funds in the UK without paying tax on them, and he will have to pay a £30,000 charge for the election from his 8th year of residence.

[ssafridi]

Yes, he would definitely need to declare the income he received while he was resident. There is no real point moving that money offshore, it makes no difference now.

The position won't necessarily be any different if the dividends are paid to an offshore account as, by default, Mr A is liable to tax on his worldwide income.

He could elect to be taxed on the remittance basis but - he has to file a return to do this, he would lose his personal allowance and CGT annual exemption, he can't then use the funds in the UK without paying tax on them, and he will have to pay a £30,000 charge for the election from his 8th year of residence.

Dear AGoodman,
Thank you very much. Assume a remittance basis of taxation is adopted and the money was not used in UK. I have read some guidance and it seems to me that you are very right. Usage of the funds in the UK is not important. Even if they are brought to the UK they will be taxed irrespective of usage. Is that right?

[AGoodman]

Yes, the definition of "remittance" is very wide and "use" is just one example. Simply bringing the monies to the UK would also be a remittance.