Can I Send Money Back To The UK Untaxed?

expat network

Can I Send Money Back To The UK Untaxed?

Am I right in thinking that, as long as fewer than 90 days is spent in the UK in a tax year, then overseas earnings may be repatriated to the UK without attracting UK tax? Am I also right that these repatriated earnings may NOT be used for investment in individual savings accounts (ISAs)?

Adam Thompson, tax manager of The Fry Group, answers that the criteria for being non-resident for UK tax purposes changed with effect from 6 April 2013.

“Under the new legislation,” says Thompson, “your residence status is not simply determined by the number of days that you spend in the UK, but instead via a three part test. If you would like for one of our team to review your residence position under the new rules, please let me know.

“Assuming that you are non-resident, there is nothing to stop you from transferring funds to the UK. Please note however that any funds that you hold in the UK do come under the UK tax system and you may therefore have a UK tax liability on any income generated.

“As a non-resident you would as a general rule be unable to make contributions to an ISA. Any funds held in ISAs prior to becoming non-resident do retain their tax status.”

You can read more about the UK’s test to check if you are non-resident for tax purposes here

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.