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Money Transfers for Expats in the United Kingdom

Submitted: July 2013

There are no legal restrictions on capital flows to and from the United Kingdom.

 

Bank restrictions and charges

You can generally transfer money free of charge and without restriction to another UK account.

Your bank may charge you for your transfers outside the UK, even if they are SEPA payments to another EEA country. Outbound international transfers may also be disallowed on some UK bank accounts. You might wish to check the applicable charges and restrictions at your UK bank.

Foreign exchange considerations must also be taken into account, unless you use offshore sterling holdings. See Foreign Exchange for Expats in the UK.

 

Cash control rules

You must make a declaration to Her Majesty’s Revenue and Customs (HMRC) if you transfer more than €10,000 (or currency equivalent) worth of cash to a non-EU country.

Cash transfers include banknotes and coins, banker’s drafts, and cheques. International bank transfers are not within the scope of cash control rules.

 

Remittance basis

In the UK, resident individuals must pay UK income tax on their worldwide income and capital gains. However, a concession exists for UK residents who are not UK domiciled, whereby such individuals may choose to pay tax on their UK income as it arises, and on their foreign income as it is remitted to the UK. Therefore, it is possible to achieve significant tax deferral benefits in respect of unremitted foreign income, if not total UK tax exemption.

The concept of “domicile” involves a large number of factors, and it is possible not to be UK domiciled even though you have lived in the UK for more than 10 years. Expatriates in the UK are therefore very likely to have “non-UK domiciled” status, but this is not automatic either. Furthermore, it is not necessarily interesting for expatriates to opt for the remittance basis, because doing so results in losing certain tax benefits. Opting for the remittance basis may actually raise your tax bill by a few thousands of pounds if you are employed in the UK.

For more information on this matter, check the Manual on residence, domicile, and the remittance basis.

Expatriates who intend to rely on the remittance basis should plan carefully before transferring money into the UK. Otherwise, the Inland Revenue (HMRC) may treat money transfers (in cash or in kind, wholly or partly) as remitted foreign income, and tax it accordingly.

 

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