US Dollars Under Tax?

neak

Hi there,
I have a currency account with the bank and over the year I've had about $3,000 come in from the US which is stored in this currency account. The cheques are cashed into the account and no money is taken out from it, I like to save it there as I don't rely on it and would like to withdraw when the $ is much higher than the £. The way the account works is that the transaction is made from $ to £ when I withdraw, not when I deposit.

So I was just wondering, seeing as this money has not changed over until I withdraw it, do I need to declare it for tax?

Cheers,
D

Cook_County

The $3,000 may or may not be taxable, you have not said.

The gain on the foreign currency is taxable as a capital gain.

trevormax

If you are UK Resident and ordinary resident (which you likely are if you live in the UK) then any income you earn on these savings will be taxable. If you pay tax on the savings in the states which is equal or greater than the amount you would have paid if it were in the UK then this will mean you wont have to pay tax here. If you dont pay tax in the states or the amount paid is less than it would have been over here then you will have to pay the difference.

You do have to declare the income though I think.

Cook_County

trevormax wrote: »

If you are UK Resident and ordinary resident (which you likely are if you live in the UK) then any income you earn on these savings will be taxable. If you pay tax on the savings in the states which is equal or greater than the amount you would have paid if it were in the UK then this will mean you wont have to pay tax here. If you dont pay tax in the states or the amount paid is less than it would have been over here then you will have to pay the difference.

You do have to declare the income though I think.

This is inaccurate. There is no US tax if the OPis a non-resident alien. Any interest on the $3,000 would therefore not be taxable in the US, but only in the UK.

The $3,000 may or may not be taxable - we don't know if it birthday presents received or earnings!

Foreign currency gains would of course be taxable & reported on the OP's UK tax return.