Transfer Money to UK

gemignani

Hi all,
I'm working PAYE full time and I pay taxes @ 40%.
I was born and lived many years in Brazil and I would like to transfer some money to UK (I would be using HSBC Global Transfer, but I can consider other methods) to start saving in a ISA to buy a house.
Will I have to pay or declare anything? I have already paid the taxes on that money when I earned back in Brazil.

Thank you very much,

agrinnall

You shouldn't have to pay anything, transfers into the UK are normally free of UK taxes (I think there may be a very few exceptions but most people would not fall into those categories). And I'm not aware of any need to declare it yourself - it's possible that HSBC may have to report it for anti-money laundering purposes though if it's a lot of money, so make sure you have evidence of the source of the money.

gemignani

I found HS264 document which gives me loads of info, but I'm not sure if all that applies to me.
Well I'm a residence here for 2015-16 and I think I should consider myself a non-domiciled so the money I will bring in would be considered as a remittance (is the nature of transaction considered capital gain? all the cash is in my savings account in Brazil).
In this line I found that I would only be exempt of paying taxes for the first £2000.

I believe I would not have to do a self-assessment, but I'm quite confused about all this situation.

Spidernick

Ignore post number 2, as this is completely wrong and people shouldn't post opinions when facts are required and could cost you a lot of money, as here.

Read this:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464664/RDR1_FB15_updates_RB_and_CGT.pdf

You will almost certainly have 'mixed funds', so will need professional advice before bringing the money into the UK, especially if the amounts are significant.

The £2K is also a limit for non-UK income that doesn't affect your personal allowance if you choose the remittance basis, it's not an amount you can bring in before paying tax.

If you bring in funds to the UK that are taxable here then you would get relief for any Brazilian taxes paid on this (albeit that the UK doesn't have a tax treaty with Brazil - there's something called 'unilateral relief' to limit double taxation).

gemignani

Thank you very much for your help, I really appreciate it.
It is frustrating to have to pay for professional help when the information should be clear and available on the internet. This sort of consultancy should be used by companies or high-earn individuals.

I read some relevant parts of RDR1 document and I'm confident that I can remit up to £2k per tax-year. So a couple can plan ahead to take advantage of this allowance, but can it be consumed retrospectively? If we save to buy a house and do it in 7 year, can we remit £14K each?

Alternatively I could do the super complicated calculation based on INTM161010 and the unilateral relief, but it doesn't seem to be user friendly.

Spidernick

gemignani wrote: »

Thank you very much for your help, I really appreciate it.
It is frustrating to have to pay for professional help when the information should be clear and available on the internet. This sort of consultancy should be used by companies or high-earn individuals.

I read some relevant parts of RDR1 document and I'm confident that I can remit up to £2k per tax-year. So a couple can plan ahead to take advantage of this allowance, but can it be consumed retrospectively? If we save to buy a house and do it in 7 year, can we remit £14K each?

Alternatively I could do the super complicated calculation based on INTM161010 and the unilateral relief, but it doesn't seem to be user friendly.

Sorry, but that is wrong. The situation is as per my post above.

How long have you lived in the UK? How much money are we talking here? Do you have one account with all that has been added to it since you arrived in the UK is interest? If so then you will have mainly 'clean capital', which is tax free, but the interest will be deemed to have been remitted first, so you might have to pay tax on that. However, if Brazilian rates are anything like UK ones that's probably not going to be much of a problem.

If you have an account that has a variety of things paid into it since you arrived (interest, dividends, rental income, inheritance, or whatever), then that is going to be more problematic and the rules for keep track of a 'mixed fund' are a 'interesting' shall we say! In that instance you would need professional help.

Feel free to hit the 'thanks' button for these messages, if you find them helpful. It is appreciated.

gemignani

Thank you again.
In 2014-15 I was not a resident of the UK (PAYE @ 20%) , so 2015-16 is my first full year and PAYE @ 40 %.
I can easily track everything I have remitted to the UK (2014-15 probably around £5-7K and 2015-16 less than £1K), I own a single bank account and I don't have investments here (lazy...)
I currently have ~ £60k in savings in Brazil which were earned at @ 27.5% TAX there, but I'm not planning remitting it now as I'm betting on long term profit (interest/fx over ~ 5y)

That might look a bit complicated, but it is not at all. I obviously don't want to do anything wrong and I believe there might be a good soul around here

Spidernick

gemignani wrote: »

Thank you again.
In 2014-15 I was not a resident of the UK (PAYE @ 20%) , so 2015-16 is my first full year and PAYE @ 40 %.
I can easily track everything I have remitted to the UK (2014-15 probably around £5-7K and 2015-16 less than £1K), I own a single bank account and I don't have investments here (lazy...)
I currently have ~ £60k in savings in Brazil which were earned at @ 27.5% TAX there, but I'm not planning remitting it now as I'm betting on long term profit (interest/fx over ~ 5y)

That might look a bit complicated, but it is not at all. I obviously don't want to do anything wrong and I believe there might be a good soul around here

If you remit while not tax resident in the UK, then that isn't taxable, so you're fine for 2014/15, if indeed you were not tax resident then (but you might be for part of the year - that's a whole different ball game ). However, from the sounds of it you may have remitted a little bit of taxed interest, but mostly clean capital. In theory you should declare the remitted interest, but in practice it would cost HMRC more to issue you with a return that the tax they would collect and is probably within their 'tolerance levels' in any case.

If you think you might want to remit the large sum in the future then I'd suggest keeping all the 'clean capital' separate, with interest, etc in a different account (or even multiple accounts, but that's more for the very rich) and you could then bring the 'clean capital' into the UK tax free in the future (albeit you may have a bit of interest in there already).

gemignani

I don't get how you considered that large sum "tax free". Even if I have another bank account for it, that would not matter in the taxman eyes, but clearly would simplify the calculation.

I understand that any interest earned abroad is subject to tax whilst UK resident, but what if FX consumes the interest profit? The currency I own devaluated ~ 40% to GBP and I'm betting that the interest paid in Brazil could offset that in 5y, but it would not be fair to pay 40% tax in my capital as it was not a net capital gain in GBP, so I'm not sure how to explain this! I could check how much I had before I was considered UK resident.

agrinnall

Spidernick wrote: »

Ignore post number 2, as this is completely wrong and people shouldn't post opinions when facts are required and could cost you a lot of money, as here.

It's wrong in the basis of additional information in post #3, I'm not a mind reader so I worked on the situation that would apply to most people, but with the caveat that there are exceptions. If the OP wants definitive answers then let them pay a tax adviser to provide them.

Spidernick

gemignani wrote: »

I understand that any interest earned abroad is subject to tax whilst UK resident, but what if FX consumes the interest profit? The currency I own devaluated ~ 40% to GBP and I'm betting that the interest paid in Brazil could offset that in 5y, but it would not be fair to pay 40% tax in my capital as it was not a net capital gain in GBP, so I'm not sure how to explain this! I could check how much I had before I was considered UK resident.

Use the exchange rate at the date of remittance (rather than when paid), as that's in line with what you'll be getting in the UK (before charges).

Yes, you would need to look at your balance before you became UK-tax resident, but there can be a lot more to it than that and it depends on what you've been doing with the funds in the account. It can get very messy, which is why the best thing to do is get professional help with this.