Buying a property in the UK with money from abroad

Beckster2015

Hi everyone!
I understand that any advice given is not legally binding etc but I'm hoping someone might be able to advise or point me in the right direction of speaking to someone please. (Solicitor/financial advisor/accountant etc)
My husband and myself both hold UK passports. I own a house in the UK and my husband lives and works abroad (he does have a UK bank account for ease of use when he visits the UK). I travel between the 2 countries and am in the UK long enough each year to be classed as a UK tax resident.
We are looking to both relocate and buy a house together in the UK. The money would be coming from the sale of my UK property and also savings on earnings that my husband has whilst working abroad. No mortgage would be required.
Can anyone please tell me if...
A) his cash coming from abroad would be accepted and/or taxed.
whether it would be better for him to transfer his money into my British account first and I buy the house outright in my name? (Also any tax implications with him transferring the money from his foreign account to my British account.)
Thank you so much. 😊

Hoenir

No apparent reason for the money to be taxed if it his. 

Wider issues are those of money laundering. The source of any funds will require an auditable document trail.  Is his bank aware that he is currently a non resident. 

DullGreyGuy

Beckster2015 said:

Hi everyone!
I understand that any advice given is not legally binding etc but I'm hoping someone might be able to advise or point me in the right direction of speaking to someone please. (Solicitor/financial advisor/accountant etc)
My husband and myself both hold UK passports. I own a house in the UK and my husband lives and works abroad (he does have a UK bank account for ease of use when he visits the UK). I travel between the 2 countries and am in the UK long enough each year to be classed as a UK tax resident.
We are looking to both relocate and buy a house together in the UK. The money would be coming from the sale of my UK property and also savings on earnings that my husband has whilst working abroad. No mortgage would be required.
Can anyone please tell me if...
1) his cash coming from abroad would be accepted and/or taxed.
2) whether it would be better for him to transfer his money into my British account first and I buy the house outright in my name? (Also any tax implications with him transferring the money from his foreign account to my British account.)
Thank you so much. 😊

1) Irrespective of where the money comes from you will be asked to provide proof of its source as basic anti-money laundering measures. Depending which country its coming from those checks may or may not be more rigorous than if it had come from a UK source. If he is not a resident for tax purposes then it will not be taxed

2) Still no tax implications but if you buy the house in your name alone you have to be able to show you can afford it alone; assuming you are going to be needing a mortgage. He would still need to prove where the money came from. 

Beckster2015

Thank you!
Hoenir... Yes his bank are aware that he is a non resident and only uses his account to pay for shopping etc when he is visiting the UK.
DullGreyGuy... I am totally expecting (getting prepared for) lots of questions and proof of his earnings and where his money has come from. He is a partner in a company so will hopefully have all the required information 🙏!
We won't be looking to apply for a mortgage so won't have to deal with lenders. 
I just didn't know whether it would be easier for him (as my husband) to "gift" me the money beforehand and I buy the property in my name. (Obviously paperwork would be drawn up with a solicitor to deal with the unfortunate event of a divorce).
I wouldn't know who best to talk to get advice on tax implications and legalities 🤔?

Hoenir

Beckster2015 said:

I just didn't know whether it would be easier for him (as my husband) to "gift" me the money beforehand and I buy the property in my name. 

The conveyancing solicitor is responsible for performing the AML checks on you as well. The actual source of the funds will still have to be declared. The higher the amount of "cash" the greater the scrutiny.  Property has long been known as a way of washing sizable sums of money to make it legitimate. 

DullGreyGuy

Beckster2015 said:

Thank you!
Hoenir... Yes his bank are aware that he is a non resident and only uses his account to pay for shopping etc when he is visiting the UK.
DullGreyGuy... I am totally expecting (getting prepared for) lots of questions and proof of his earnings and where his money has come from. He is a partner in a company so will hopefully have all the required information 🙏!
We won't be looking to apply for a mortgage so won't have to deal with lenders. 
I just didn't know whether it would be easier for him (as my husband) to "gift" me the money beforehand and I buy the property in my name. (Obviously paperwork would be drawn up with a solicitor to deal with the unfortunate event of a divorce).
I wouldn't know who best to talk to get advice on tax implications and legalities 🤔?

In the UK there would be no paperwork to be drawn up to deal with a divorce, irrespective of who's name the property is in it will be considered a marital asset and so the working assumption will be a 50/50 split unless one side can satisfy the court that there is good reason why it shouldn't be  and that an alternative split will still be fair and sufficient for the party receiving the reduced amount. 

If you maintain your life overseas too then there may be an argument that the divorce could be dealt with there and you would need legal guidance for that legal jurisdiction and how a divorce there could be enforced on assets here. 

There are no tax implications based on the purchase; if you were at a later date to change it to a second home and then go on to sell it then there could be CGT considerations where the gains may be favourable to materialise under one of your names rather than jointly. Similarly were you wanting the house to pass to your kids and not your husband on your death but that could partially be sorted with a Tenants in Common rather than Joint Tenants arrangements and could potentially be challenged if it was still your primary residence. 

Albermarle

I just didn't know whether it would be easier for him (as my husband) to "gift" me the money beforehand and I buy the property in my name. (Obviously paperwork would be drawn up with a solicitor to deal with the unfortunate event of a divorce).

For sure if you are getting a mortgage, but paying for some of the deposit with money gifted to you, then the giver has to sign a form to say it is an outright gift, and they will have no benefit or demands over the money in future. This is for the mortgage company
With no mortgage, I am not so sure what the solicitor might require as to the status of the gift, but maybe will want something to show it is actually a real gift, and not effectively a loan to be repaid.

user1977

Albermarle said:

With no mortgage, I am not so sure what the solicitor might require as to the status of the gift, but maybe will want something to show it is actually a real gift, and not effectively a loan to be repaid.

The solicitor won't/shouldn't care about what the arrangement is between the spouses, but they will need to check the source of funds in the same way irrespective of who the funds are flowing through.

Beckster2015

Thank you so much everyone. Definate food for thought!

RHemmings

Hoenir said:

No apparent reason for the money to be taxed if it his. 

Wider issues are those of money laundering. The source of any funds will require an auditable document trail.  Is his bank aware that he is currently a non resident. 

About half of the money that I bought my house with came from abroad. 

I had to provide quite a bit of 'audit trail' as to where the money came from.