Best time for moving savings from overseas to the UK

dan_first_time_buyer

Hi.

I am about my move my residency from Italy back to the UK in the next few days (beginning of May).

I'd like to move my savings from my Italian bank to my UK bank because of a better interest rate. The savings are in the order of the tens of thousands.

My question is: should I do this transfer while I'm still an Italian resident or once I become a UK resident? Are there advantages to do one way over the other one, or there is no difference at all?

I'd like to avoid any potential "fiscal headache" (e.g. having to prove the savings have already been taxed, etc...) as I'm moving a chunk of money. I would use a service like Wise.com (to save on exchange rate) so that would add another layer of complexity.

Has anyone an opinion on this please?

Thanks,
Dan

Hoenir

Is your UK bank aware that you have been non resident ? 

Perhaps be better to effect the transfer once you are back in the UK. Documentary evidence as to the source of the funds may well be requested. The bank has no concerns over tax. That's a matter for the HMRC. 

dan_first_time_buyer

Thanks Hoenir.

No, I haven't told the bank that I hadn't been a resident for the last 3 years. I have told HMRC though.

Exactly - it's HMRC my concern. 

dan_first_time_buyer

Thinking about it, wouldn't it be actually better to move the savings to the UK before I become a UK-resident (again)?

In fact HMRC wouldn't challenge non-UK-residents over taxes, as that would be beyond their jurisdiction? Am I right about this? Or else, the fact that we are talking about a UK bank and/or a UK citizen (like myself) would put things under their control anyway?

TheSpectator

dan_first_time_buyer said:

Thinking about it, wouldn't it be actually better to move the savings to the UK before I become a UK-resident (again)?

In fact HMRC wouldn't challenge non-UK-residents over taxes, as that would be beyond their jurisdiction? Am I right about this? Or else, the fact that we are talking about a UK bank and/or a UK citizen (like myself) would put things under their control anyway?

Not sure why you think HMRC would have any interest. Your biggest issue I feel will be getting your UK bank to accept a transfer from an overseas bank especially as you failed to tell them you were no longer resident in the UK, probably breaching the terms of your account. You may have questions to answer as to where the funds came from for AML purposes.

Only interest HMRC will have is when the money is in the UK and earning interest that any tax is paid on it at the end ofvthe tax year.

Hoenir

dan_first_time_buyer said:

Thanks Hoenir.

No, I haven't told the bank that I hadn't been a resident for the last 3 years. I have told HMRC though.

Exactly - it's HMRC my concern. 

The Italian tax authorities are equally as likely to take an interest. The HMRC will openly share data with their Italian counterparts. 

dan_first_time_buyer

TheSpectator said:

Not sure why you think HMRC would have any interest.

Because HMRC may think that money is earnings and therefore I should pay tax on it, but then they don't find the tax being paid on it.

Especially given that the transfer will not come directly from my Italian bank account but from Wise.com (a middleman that allows me to save on currency exchange).

HMRC may think that Wise.com is paying me for some work I did for them as a freelancer (for example) and it expects me to pay tax on it.

Am I right this could happen?

dan_first_time_buyer

Hoenir said:

The Italian tax authorities are equally as likely to take an interest. The HMRC will openly share data with their Italian counterparts. 

Good point.

dan_first_time_buyer

This is quite frustrating.

I know I'm not doing anything wrong (just moving my savings to a bank account to another to get better interests) but somehow I'm afraid that I would look suspicious and get an inspection, and I may not be prepared to deal with it.

Who could I ask about this? HMRC? The Italian equivalent? Or who else?

wmb194

dan_first_time_buyer said:

Hi.

I am about my move my residency from Italy back to the UK in the next few days (beginning of May).

I'd like to move my savings from my Italian bank to my UK bank because of a better interest rate. The savings are in the order of the tens of thousands.

My question is: should I do this transfer while I'm still an Italian resident or once I become a UK resident? Are there advantages to do one way over the other one, or there is no difference at all?

I'd like to avoid any potential "fiscal headache" (e.g. having to prove the savings have already been taxed, etc...) as I'm moving a chunk of money. I would use a service like Wise.com (to save on exchange rate) so that would add another layer of complexity.

Has anyone an opinion on this please?

Thanks,
Dan

It doesn't matter, it won't make any difference. The most anyone will ask is the source of the funds, not whether they have been taxed.

TheGreenFrog

dan_first_time_buyer said:

Hi.

I am about my move my residency from Italy back to the UK in the next few days (beginning of May).

I'd like to move my savings from my Italian bank to my UK bank because of a better interest rate. The savings are in the order of the tens of thousands.

My question is: should I do this transfer while I'm still an Italian resident or once I become a UK resident? Are there advantages to do one way over the other one, or there is no difference at all?

I'd like to avoid any potential "fiscal headache" (e.g. having to prove the savings have already been taxed, etc...) as I'm moving a chunk of money. I would use a service like Wise.com (to save on exchange rate) so that would add another layer of complexity.

Has anyone an opinion on this please?

Thanks,
Dan

I agree with @wmb194.  It doesn't matter.  Plenty of expats working abroad maintain a UK account without telling the bank they are living abroad (as the bank would likely close the account).  And plenty of expats freely transfer money earned whilst working abroad to their UK accounts both whilst resident and after moving back to the UK.