Overseas money and Tax

two3seven

Hi all,

My partner is a Swedish national who has been living in the UK for the last 12 years. Her mother (living in Sweden) has gifted her £20k from the sale of a property. If her mother was to transfer this money over to the UK, would there be any tax implications or procedures that we need to be aware of?

Many thanks

Savvy_Sue

In the UK, you'd need to pre-warn the receiving bank and explain where it was coming from (money-laundering precautions), but no tax at this end.

Sweden, no idea.

two3seven

Excellent, thanks Savvy_Sue

agrinnall

Savvy_Sue wrote: »

In the UK, you'd need to pre-warn the receiving bank and explain where it was coming from (money-laundering precautions), but no tax at this end.

No you don't. Some people might say you do but my experience of SWIFT messaging is that it's pretty much entirely automated, and even if there is manual intervention the chances are remote that any warning that a customer has given to someone on the end of a phone will get through to the right person.

Cook_County

Your partner and/or partner's mother may have a liability in Sweden.

Savvy_Sue

agrinnall wrote: »

No you don't. Some people might say you do but my experience of SWIFT messaging is that it's pretty much entirely automated, and even if there is manual intervention the chances are remote that any warning that a customer has given to someone on the end of a phone will get through to the right person.

Fair enough. In that case I'd say you'd need to be ready to given an explanation of where the money's come from once it leaves Sweden and before it becomes spendable in your account. May be worth speaking to the receiving bank to ask what will happen and what might trigger enquiries.

agrinnall

Savvy_Sue wrote: »

Fair enough. In that case I'd say you'd need to be ready to given an explanation of where the money's come from once it leaves Sweden and before it becomes spendable in your account. May be worth speaking to the receiving bank to ask what will happen and what might trigger enquiries.

I'd agree that having the information available is a good idea. The bank will under no circumstances tell you what might trigger AML enquiries as I believe they would be breaking the law to do so. Front line staff are unlikely to know the triggers for incoming SWIFT payments anyway as it's not something they would ever have to deal with.

Spidernick

Things might not be as simple as others are suggesting. If the individual in domiciled outside the UK (presumably yes), then they should be OK if they are either already paying tax on their worldwide income (the arising basis), have no non-UK income or gains sitting outside the UK, or if the gift comes directly to the UK without going first into another non-UK account with other funds in it.

The problem arises if the £20K is first put into a non-UK account that has other sources of income or gains in it already and is then remitted to the UK. In that instance the person could bring in taxable income and gains without realising it, due to HMRC's complex 'mixed fund' rules (whereby taxable elements are deemed to be brought into the UK before 'clean capital' such as the gift). The chances are this won't be an issue, but this does need to be mentioned.

More details around 'mixed funds' are here (page 3):

http://www.ey.com/Publication/vwLUAssets/Remittances/$FILE/Remittance_eng.pdf