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Receiving a large sum from overseas - Tax implications?
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# 1
seeafish
Old 25-08-2011, 11:45 AM
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Default Receiving a large sum from overseas - Tax implications?

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.
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# 2
Cook_County
Old 25-08-2011, 12:13 PM
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Where is your wife domiciled? You are talking about CGT either on the arising or remittance basis.
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# 3
seeafish
Old 25-08-2011, 12:37 PM
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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.
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# 4
John_Pierpoint
Old 25-08-2011, 4:13 PM
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Quote:
Originally Posted by seeafish View Post
* 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].
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# 5
seeafish
Old 25-08-2011, 4:24 PM
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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?
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# 6
CLAPTON
Old 25-08-2011, 5:05 PM
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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
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# 7
seeafish
Old 25-08-2011, 5:24 PM
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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?)
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# 8
CLAPTON
Old 25-08-2011, 5:46 PM
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Quote:
Originally Posted by seeafish View Post
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
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# 9
John_Pierpoint
Old 25-08-2011, 5:49 PM
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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..._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.
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# 10
seeafish
Old 25-08-2011, 6:55 PM
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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.
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# 11
tyllwyd
Old 25-08-2011, 9:03 PM
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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.
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# 12
Cook_County
Old 26-08-2011, 8:11 PM
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So your wife has UK CGT to address, and will either file on the arising or the remittance basis to report any gain or loss.
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# 13
seeafish
Old 26-08-2011, 11:26 PM
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Quote:
Originally Posted by Cook_County View Post
So your wife has UK CGT to address, and will either file on the arising or the remittance basis to report any gain or loss.
Sorry, I'm really not familiar with the terminology. Arising and remittance??

Cheers.
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# 14
Cook_County
Old 27-08-2011, 12:06 PM
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Does she report worldwide income and gains on her UK returns or limit herself to reporting UK income?
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# 15
seeafish
Old 27-08-2011, 12:39 PM
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Quote:
Originally Posted by Cook_County View Post
Does she report worldwide income and gains on her UK returns or limit herself to reporting UK income?
Well she's been a student since she arrived here, and won't start working until early next year most likely, so no income so far.

She has no income coming from overseas either.

I guess if she had a job, she would report UK income only, as she does't have any overseas income.
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# 16
Cook_County
Old 27-08-2011, 12:55 PM
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The first thing you need to do is figure out the gain under UK rules. Once you know what this is you can then decide if she wants to pay UK tax on it or not. Because she is not domiciled within the UK she could elect to claim the remittance basis and then only pay tax on the gain to the extent it is remitted to the UK.
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# 17
hermante
Old 28-08-2011, 7:56 AM
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To save money on the transfer, see if the bank in Iran will let you convert to Pounds? Or even DKK and sending it to Denmark. Can the money be considered a gift from your father-in-law to you?

Quote:
Originally Posted by CLAPTON View Post
it's very unlikely that any vendor will accept an international transfer.
How do you explain the hordes of middle eastern and Chinese people buying up London then?
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# 18
CLAPTON
Old 28-08-2011, 9:02 AM
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Quote:
Originally Posted by hermante View Post
To save money on the transfer, see if the bank in Iran will let you convert to Pounds? Or even DKK and sending it to Denmark. Can the money be considered a gift from your father-in-law to you?



How do you explain the hordes of middle eastern and Chinese people buying up London then?

I would expect foreigners to transfer their money to a UK bank a/c and then buy the property from that UK bank a/c in UKPs.
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# 19
MarcoM
Old 28-08-2011, 7:03 PM
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Quote:
Originally Posted by John_Pierpoint View Post
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].
What sort of investigation would it trigger?
Would they freeze the money till they are happy?

I think it is unfair for a bank to do so. So much for living in a free society....
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# 20
John_Pierpoint
Old 29-08-2011, 3:54 AM
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.............Now smell the coffee.

http://www.lawsociety.org.uk/product...notes/aml.page

http://www.hmrc.gov.uk/mlr/getstarted/intro.htm

Ah the good old days, when it took about five minutes to bounce into a Building Society and bounce out again with a new account.

Last edited by John_Pierpoint; 29-08-2011 at 4:03 AM.
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