Receiving a large sum from overseas - Tax implications?

seeafish · 25 August 2011 at 11:45AM

New to the forums so hello everyone!

I've been scratching my head for hours trying to find out the laws on taxation when it comes to receiving, say £200,000, from overseas.

The money will come from a piece of land owned jointly by my father-in-law and my wife. My wife's name is only on the deed, she didn't actually pay for it at all. It was a wedding gift from my father-in-law.

* will this count a gift? If so, is it taxable and by how much?
* how does one go about transferring such a large sum to the UK? Simple bank transfer?

Thanks.

Cook_County · 25 August 2011 at 12:13PM

Where is your wife domiciled? You are talking about CGT either on the arising or remittance basis.

seeafish · 25 August 2011 at 12:37PM

Sorry, should give some more information.

I am a resident here (been living in the UK since 2001) but a Danish (EU/EEC) national.
My wife isn't domiciled. She moved here from Iran in 2007, but on a EU/EEC Spouse Visa until her naturalisation in 2013.

Could you please explain how CGT would hit me and perhaps the percentages involved?
Thanks.

John_Pierpoint · 25 August 2011 at 4:13PM

seeafish wrote: »

* how does one go about transferring such a large sum to the UK? Simple bank transfer?
Thanks.

A sum that large is likely to trigger an investigation by the UK receiving bank. Google "money laundering" for further details.
Not to mention that it will be over the £85K deposit guarantee.

I have no idea about the procedures in Iran, but Iran and "The West" are not on the best of terms at the moment, so the purpose of your wife's deposit might be "misconstrued".

[I had a colleague who was Argentinian - he had not worked there for 40 years, so it came as something of a shock when, during the "Falklands crisis" all his accounts were frozen, which included the one with his pay in it].

seeafish · 25 August 2011 at 4:24PM

Gosh, hadn't even considered that... damn politics!

Let's say there were no "political" problems with the transfer. How would I do it, and what kind of tax is applied?

CLAPTON · 25 August 2011 at 5:05PM

if your wife is going you £200,000 in 'cash' then there is no tax payable by you.... we have no gift tax in the UK (excluding inheritance tax issues)

if it is coming from abroad then you may be asked to explain the origin of the money

whether or not your wife is liable to tax is another matter

seeafish · 25 August 2011 at 5:24PM

The money will be used to buy a house here in the UK. Is it possible to perhaps not transfer it at all, and simply pay for a house using the Iranian bank account? (i.e. is is possible to pay for a house using an international bank account, in full, without any taxing?)

CLAPTON · 25 August 2011 at 5:46PM

seeafish wrote: »

The money will be used to buy a house here in the UK. Is it possible to perhaps not transfer it at all, and simply pay for a house using the Iranian bank account? (i.e. is is possible to pay for a house using an international bank account, in full, without any taxing?)

why complicate things?

it's very unlikely that any vendor will accept an international transfer.

once the money is tranferred to your UK bank a/c, it can be used for any purpose you like

John_Pierpoint · 25 August 2011 at 5:49PM

I have never been lucky enough to receive a foreign payment with lots of zeros - so I cannot really advise.

[Father in Law, I'm going back BC (before computerised transfers) went away on a retirement holiday of a life time. As well as cutting the grass, we were instructed to keep an eye open for a large payment from Malaysia and he had made arrangements with his bank to process it into his deposit account. Large cheque arrived and we went to local branch of clearing bank as instructed. Are you surprised to lean that the clearing bank had charged a meaty amount for converting the currency and then left the proceeds to await instructions in his current account].

Personally I would Google a few "ex pat" web sites and their forums for suggestions and then discuss options with the people at the Iranian end.

Beware of picking a bank like this one.
http://en.wikipedia.org/wiki/Bank_of_Credit_and_Commerce_International

John.

PS: Gosh, hadn't even considered that... damn politics!

I would think that a country, with abundant oil reserves, keeping itself busy by spinning uranium gas through hollow fibre, in an attempt to concentrate the radioactivity; might well be playing Russian Roulette, with the live of millions, not just silly "mine is bigger than yours" politics.

seeafish · 25 August 2011 at 6:55PM

Well, clearing that sum into a UK bank account is likely to spark all kinds of investigation. Of course the money is from a valid, legal source, however getting documents translated and sent over will just be a lot of delay and headache...

Ahh well.

tyllwyd · 25 August 2011 at 9:03PM

I would also check the tax situation in Iran, just in case there is a tax liability for your wife when the land is sold.

Receiving a large sum from overseas - Tax implications?

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