Receiving a large sum from overseas - Tax implications?

CLAPTON

MarcoM wrote: »

So if one were to receive a significant inheritance from abroad would it mean they would have their money frozen till the authorities are happy?
Sounds like a dictatorship to me.

the money laundering regulations apply to any financial trasactions and not specifically money from abroad

seeafish

man this is all kind of starting to bother me.

I have discovered that there WILL be tax applied to selling the land in Iran (applied by the Iranian government). Fine.
Now, can my WIFE "gift" that amount to me without any tax? Somehow I don't think it's that simple, cos of the whole "why doesn't everyone just do that then" thing.

In terms of the money laundering of terrorism laws, I guess you just have to prove the legitimacy of the transfer correct? This means getting a trolley load of documents officially translated and approved, sent half way round the world, then put in what is most likely going to be a very long admin queue at the tax office.

Now, while it may be possible to buy a property using an overseas account, I wonder how many sellers will actually agree to a sale once they realise that that is the case...

I feel more confused now than when I initially asked the questions Perhaps I should go speak to some kind of overseas tax lawyer (they exist right?) or an accountant?

Cheers.

antrobus

seeafish wrote: »

man this is all kind of starting to bother me.

I have discovered that there WILL be tax applied to selling the land in Iran (applied by the Iranian government). Fine.

Double tax relief might well apply. Depending on what kind of tax it is that has been levied.

seeafish wrote: »

Now, can my WIFE "gift" that amount to me without any tax? Somehow I don't think it's that simple, cos of the whole "why doesn't everyone just do that then" thing.

Yes she can. It really is that simple. Spouses frequently gift each other money and other assets for no other reason than to 'mitigate' their tax bills.

seeafish wrote: »

In terms of the money laundering of terrorism laws, I guess you just have to prove the legitimacy of the transfer correct? This means getting a trolley load of documents officially translated and approved, sent half way round the world, then put in what is most likely going to be a very long admin queue at the tax office.

It's not so much a 'tax office' thing as a 'banking-police' thing. The receiving bank has a duty to report any transaction it thinks looks a bit dodgy, so it's a question of making sure that your bank is kept in the loop.

seeafish wrote: »

Now, while it may be possible to buy a property using an overseas account, I wonder how many sellers will actually agree to a sale once they realise that that is the case...

Shouldn't be an issue if you have a solicitor dealing with your side of things - they'll have done their money laundering, which is all the vendor's lot will care about.

seeafish wrote: »

I feel more confused now than when I initially asked the questions Perhaps I should go speak to some kind of overseas tax lawyer (they exist right?) or an accountant?

Cheers.

It's always a good idea to get advice from a proper professional rather than random people off the internet. One thought; is there such a thing as an Iranian ex-pat community in Britain? Is your wife in contact with any of her former countrymen? They might be able to recommend someone who knows all about this sort of thing.

seeafish

antrobus wrote: »

Double tax relief might well apply. Depending on what kind of tax it is that has been levied.



Yes she can. It really is that simple. Spouses frequently gift each other money and other assets for no other reason than to 'mitigate' their tax bills.



It's not so much a 'tax office' thing as a 'banking-police' thing. The receiving bank has a duty to report any transaction it thinks looks a bit dodgy, so it's a question of making sure that your bank is kept in the loop.



Shouldn't be an issue if you have a solicitor dealing with your side of things - they'll have done their money laundering, which is all the vendor's lot will care about.



It's always a good idea to get advice from a proper professional rather than random people off the internet. One thought; is there such a thing as an Iranian ex-pat community in Britain? Is your wife in contact with any of her former countrymen? They might be able to recommend someone who knows all about this sort of thing.

Excellent answer(s). I will definitely seek assistance from other Iranians here, as this kind of thing seems normal.

Thanks all!

Cook_County

Seeing that both of you are non-doms either of you could claim the remittance basis. If you have not done so already you should take specialist advice on the remittance basis.

sandyinvent

I don't think remittance basis is relevant. It's not income and is more akin to a PET (potentially exempt transfer) for inheritance tax purposes. Therefore there shouldn't be any tax payable.

seeafish

sandyinvent wrote: »

I don't think remittance basis is relevant. It's not income and is more akin to a PET (potentially exempt transfer) for inheritance tax purposes. Therefore there shouldn't be any tax payable.

A friend of mine said to open a bank account in my name in Iran (which is easily doable) and them simply transfer it from my own account to my UK account. That way the money will essentially be from me to me, right?

He also suggested transferring it a Swiss account (which is apparently less hassle!) and then simply using the Swiss account to pay for any property I wish to purchase here.

Any thoughts?

seeafish

ashleyingle wrote: »

As a currency broker by trade, I have had clients in similar situation with receiving inheritance abroad.

The lawyers overseas usually sorts out everything and sends your funds out to you/ or your currency broker account, minus tax needed to be paid.

If you are going to ultimately need currency in GBP to buy in UK, it would be best to convert it straight to GBP, rather than convert it to one currency ie - XXX-CHF, the FX provider (whether Currency broker or bank) takes a profit on it, and then convert CHF-GBP in the medium term and another lot of profit for the FX provider. Using a currency broker will offer you, on average, 4% more end currency compared to the banks directly. However on the other hand, Iran is a 'funny' country in the world of Anti-money laudering, and the rules frequently change, It may be wise to convert to another currency such as USD if are in demand of funds in the short/medium term. the Rial (IRR) was fixed to Dollar until 2002.

It could be shrewd to keep IRR for the time bieng as Wiki states - 'In April 2011, it was reported that state bank of Iran is working on a six months redenomination project to slash four zeros from the national currency and replace old bank notes with new ones, similar to redomination and introduction of Turkish New Lira in 2005.' The TRY is easily tradable now.

Currency Brokers are regulated by FSA and need to be registered by HMRC, therefore delays in international payments to/from currency brokers are rare.

Thanks for that in-depth answer.