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  • FIRST POST
    seeafish
    Receiving a large sum from overseas - Tax implications?
    • #1
    • 25th Aug 11, 11:45 AM
    Receiving a large sum from overseas - Tax implications? 25th Aug 11 at 11:45 AM
    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.
Page 1
    • Cook_County
    • By Cook_County 25th Aug 11, 12:13 PM
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    Cook_County
    • #2
    • 25th Aug 11, 12:13 PM
    • #2
    • 25th Aug 11, 12:13 PM
    Where is your wife domiciled? You are talking about CGT either on the arising or remittance basis.
  • seeafish
    • #3
    • 25th Aug 11, 12:37 PM
    • #3
    • 25th Aug 11, 12:37 PM
    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
    • By John_Pierpoint 25th Aug 11, 4:13 PM
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    John_Pierpoint
    • #4
    • 25th Aug 11, 4:13 PM
    • #4
    • 25th Aug 11, 4:13 PM
    * how does one go about transferring such a large sum to the UK? Simple bank transfer?
    Thanks.
    Originally posted by seeafish
    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
    • #5
    • 25th Aug 11, 4:24 PM
    • #5
    • 25th Aug 11, 4:24 PM
    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
    • By CLAPTON 25th Aug 11, 5:05 PM
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    CLAPTON
    • #6
    • 25th Aug 11, 5:05 PM
    • #6
    • 25th Aug 11, 5:05 PM
    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
    • #7
    • 25th Aug 11, 5:24 PM
    • #7
    • 25th Aug 11, 5:24 PM
    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
    • By CLAPTON 25th Aug 11, 5:46 PM
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    CLAPTON
    • #8
    • 25th Aug 11, 5:46 PM
    • #8
    • 25th Aug 11, 5:46 PM
    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?)
    Originally posted by seeafish

    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
    • By John_Pierpoint 25th Aug 11, 5:49 PM
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    John_Pierpoint
    • #9
    • 25th Aug 11, 5:49 PM
    • #9
    • 25th Aug 11, 5:49 PM
    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
    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
    • By tyllwyd 25th Aug 11, 9:03 PM
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    tyllwyd
    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.
    • Cook_County
    • By Cook_County 26th Aug 11, 8:11 PM
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    Cook_County
    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.
  • seeafish
    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.
    Originally posted by Cook_County
    Sorry, I'm really not familiar with the terminology. Arising and remittance??

    Cheers.
    • Cook_County
    • By Cook_County 27th Aug 11, 12:06 PM
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    Cook_County
    Does she report worldwide income and gains on her UK returns or limit herself to reporting UK income?
  • seeafish
    Does she report worldwide income and gains on her UK returns or limit herself to reporting UK income?
    Originally posted by Cook_County
    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.
    • Cook_County
    • By Cook_County 27th Aug 11, 12:55 PM
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    Cook_County
    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.
  • hermante
    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?

    it's very unlikely that any vendor will accept an international transfer.
    Originally posted by CLAPTON
    How do you explain the hordes of middle eastern and Chinese people buying up London then?
    • CLAPTON
    • By CLAPTON 28th Aug 11, 9:02 AM
    • 37,719 Posts
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    CLAPTON
    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?
    Originally posted by hermante

    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.
    • MarcoM
    • By MarcoM 28th Aug 11, 7:03 PM
    • 386 Posts
    • 39 Thanks
    MarcoM
    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].
    Originally posted by John_Pierpoint
    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....
    • John_Pierpoint
    • By John_Pierpoint 29th Aug 11, 3:54 AM
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    John_Pierpoint
    .............Now smell the coffee.

    http://www.lawsociety.org.uk/productsandservices/practicenotes/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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