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Old 21.06.2009, 18:45
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Money transfer to family in UK and possible UK taxation

Dear All,

I have a had permanent job in Switzerland for the last 10 months, so I am taxed at source on my salary (I am on a B-class permit). However, I have just sent a sizeable sum of money to my our family's joint account in the UK for my wife to use.

It was pointed out to me that this could be seen as income for my wife (who is on a small state pension), so she could therefore be taxed on it by the UK Inland Revenue.

In my naivete on this point, I can't believe that we could be taxed again when all I am doing is trying to help my wife who is not living with me.

Can someone please tell me what the true situation is?

Thank you very much in advance for any answers you can give.

Kind regards,

John Turner
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Old 10.07.2009, 18:01
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Re: Money transfer to family in UK and possible UK taxation

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Dear All,

I have a had permanent job in Switzerland for the last 10 months, so I am taxed at source on my salary (I am on a B-class permit). However, I have just sent a sizeable sum of money to my our family's joint account in the UK for my wife to use.

It was pointed out to me that this could be seen as income for my wife (who is on a small state pension), so she could therefore be taxed on it by the UK Inland Revenue.

In my naivete on this point, I can't believe that we could be taxed again when all I am doing is trying to help my wife who is not living with me.

Can someone please tell me what the true situation is?

Thank you very much in advance for any answers you can give.

Kind regards,

John Turner
Because the UK and Switzerland have a double taxation agreement you can't be taxed on the same income twice, *unless* the tax rates are different.

So until you have been out of the country for a whole tax year you are still resident in the UK for tax purposes. So the money you sent back is liable to taxation at the difference between the UK and Swiss tax rates.

However, my understanding is that if you fill out form P85 this allows you to inform HMRC that you are no longer living in the UK and they should leave you alone.

But it is essential that you submit this form as soon as possible.

Here is the link

http://www.hmrc.gov.uk/cnr/p85.pdf

Hope this helps.

Mike
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Old 10.07.2009, 18:04
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Re: Money transfer to family in UK and possible UK taxation

In fact, my accountant told me that whether you send money back is irrelevant as all overseas earnings are taxable in the UK, daft though that may sound. So your sending money back to the UK isn't the issue - it's your tax status back in the UK that's the problem.

I would guess if you haven't been submitting self assesment tax returns then it isn't going to matter anywaz as you aren't on HMRC's radar.

Again, P85 should be the way round it.
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