Self Assessment on Foreign Savings Interest

Chubba

Hi

To expand and to give a bit of background to the topic title - 

I have a foreign (Hong Kong) savings bank account that provides a small amount of interest - less than GBP10 per year.  I am a UK domiled resident and the interest is not remitted to the UK.  Do I need to register and complete a Self Assessment each year?

I find the Gov.UK guidance a little confusing - the notes say that if your total dividend income (including UK dividends) is less than £2,000 then SA is not needed if there is no other foreign income.  So that suggests I do need to complete one.  However, there is an HMRC  forum where someone has quoted if interest is less than £2,000 then no SA is needed.  I don't know if this is coincidence that the same £2k figure is used.

Many thanks

[Deleted User]

For that amount of interest, absolutely no need. No tax would be payable in any case!

Jeremy535897

For the avoidance of doubt, if you are domiciled and resident in the UK for tax purposes, the remittance basis can never apply to you, so it doesn't matter whether you remit it to the UK or not.

Interest is not the same as dividends, so what you say about total dividend income is irrelevant. However, the personal savings allowance of £1,000 for basic rate taxpayers extends to foreign bank interest, so if you are a basic rate taxpayer and your total UK and foreign interest is £1,000 or less, there is no tax liability and no need to declare (for higher rate taxpayers the allowance is £500).

MDMD

Jeremy535897 said:

For the avoidance of doubt, if you are domiciled and resident in the UK for tax purposes, the remittance basis can never apply to you, so it doesn't matter whether you remit it to the UK or not.

I wonder if the OP has mixed up being domiciled and actually meant they were resident (but non dom)

Jeremy535897

It may be so, although under the new rules when your foreign income is small RDR1 explains that you may (if you meet the conditions) be taxed on the arising basis anyway:

Exemption for small amounts of foreign income

9.11 If you’re employed in the UK, are not domiciled here and have only small amounts of foreign income you can benefit from an exemption on amounts you remit to the UK.

9.12 To qualify for the exemption you must meet all of the following conditions for a tax year:

• you’re UK resident
• you’re not domiciled in the UK
• you’re employed in the UK
• you’re a basic rate taxpayer (based on your worldwide income and gains)
• your income from overseas employment for the tax year is less than £10,000
• your overseas bank interest for the tax year is less than £100
• all your overseas employment income and interest is subject to foreign tax
• you’ve no other overseas income and gains
• you’re not otherwise required to complete the Self Assessment tax return

9.13 If you meet all these conditions you will be automatically taxed on the arising basis for that year and you:

• will not be liable to UK tax on your foreign income, either when it arises or when it is brought to the UK
• do not need to complete the Self Assessment tax return in respect of your foreign income for that tax year
• do not need to claim the remittance basis