Transferring money between spouses

AJ1980

Hi, I have a question regarding transfers between spouses. My wife has a bank account in Spain (in her sole name) from which we wish to transfer some funds to my bank account in the UK (in my sole name). We wish to make some over payments on a loan which is in my name in the UK.

As I understand, inter-spousal transfers in the UK are not subject to any kind of tax (correct me if this is not accurate...).

Does anybody know if this would be any different coming from an overseas / EU bank account? All the money is traceable from income, and has already been taxed in Spain.

Thanks for any help...

le_loup

You are correct, there is no tax between spouses - or anyone else as regards income tax. It matters not, the source of the money.

agrinnall

For most people the only UK tax that could ever apply is Inheritance Tax, but as the transfer is between spouses then even that is ruled out.

Runninglaps

The tax status of your wife is important here.

Is she also resident in the UK for tax purposes? Is she non domiciled? Does she pay tax on the remittance basis? The reason I ask is you say it has been taxed in Spain, but if she lives here it also needs to be declared here with the potential to pay more tax here (though you would get double taxation relief and it could well mean no additional tax). If she is non domiciled and paying tax on the remittance basis she would need to declare it as a remittance.

I don't think it is as simple as people above believe but equally if your wife's tax affairs are in order, it shouldn't be complicated.

CLAPTON

Runninglaps wrote: »

The tax status of your wife is important here.

Is she also resident in the UK for tax purposes? Is she non domiciled? Does she pay tax on the remittance basis? The reason I ask is you say it has been taxed in Spain, but if she lives here it also needs to be declared here with the potential to pay more tax here (though you would get double taxation relief and it could well mean no additional tax). If she is non domiciled and paying tax on the remittance basis she would need to declare it as a remittance.

I don't think it is as simple as people above believe but equally if your wife's tax affairs are in order, it shouldn't be complicated.

why does a gift need to be declared in the UK ?
why does a gift between spouse need to be declared in the UK?

Runninglaps

He states the wife has declared it for tax in Spain.

If she lives in Spain and is then gifting the money to spouse in the UK - no tax

If she lives in the UK, and is not on the remittance basis - no tax on gift, but she needs to have declared it as income if it has arisen since she moved here.

If she lives in the UK and is on the remittance basis - it is a remittance (even if it goes to the spouse, it is her money she is bringing into the country) she will have to pay tax on the remittance. No tax on the gift.

So in short, no tax on the gift, but there are other complications for his wife which we might not know about and there are some hints full UK tax hasn't been declared at this point.

CLAPTON

Runninglaps wrote: »

He states the wife has declared it for tax in Spain.

If she lives in Spain and is then gifting the money to spouse in the UK - no tax

If she lives in the UK, and is not on the remittance basis - no tax on gift, but she needs to have declared it as income if it has arisen since she moved here.

If she lives in the UK and is on the remittance basis - it is a remittance (even if it goes to the spouse, it is her money she is bringing into the country) she will have to pay tax on the remittance. No tax on the gift.

So in short, no tax on the gift, but there are other complications for his wife which we might not know about and there are some hints full UK tax hasn't been declared at this point.

just to clarify

there is no tax on the 'gift'
but there may be a tax implication on the source of the money whether a gift or not depending upon her tax residency etc.

Runninglaps

Yes. It's not the 'gift' here that would cause problems.