Avoiding tax on savings
February 1, 2010 3:07 PM   Subscribe

[UK-tax-filter]. I'm a resident of UK, though not a national of UK, EU or US. I work and pay taxes in the UK. Is it legal for me to transfer my money to a savings account in another country and hence avoiding the tax on the income from saving accounts? If it is not legal, how would the HMRC ever find out anyway?

Sorry if the question sounds a little daft/ naive.

p.s. Yes, I know about ISAs. I also have saving accounts in other countries that I don't have to pay tax on.
posted by moiraine to Work & Money (5 answers total)
 
As far as I am aware the only country which requires its citizens to pay taxes on all income generated worldwide is the United States.

As you say you are not a US citizen it doesn't sound like you would have to pay taxes on income generated elsewhere.

But I don't live in the UK and am not a UK citizen, so confirm the above with someone who knows what he is talking about.
posted by dfriedman at 3:17 PM on February 1, 2010


I know this will sound strange, as you're trying to limit the amount of tax you pay.

But you could call the HMRC and ask. I've spoken to them only rarely (I actually only spoke to them when they were the Inland Revenue), but I always found them pretty helpful.
posted by selton at 3:38 PM on February 1, 2010


Is it legal for me to transfer my money to a savings account in another country and hence avoiding the tax on the income from saving accounts?

Yes it's legal. If you're not domiciled then you don't need to declare offshore income to HMRC unless you remit the income to the UK.

If you are domiciled then you can compound the interest, usually in a bond, until you are no longer an ordinary resident (spend more than 180 days out of the UK per year, on average, over three years).
posted by asharchist at 3:56 PM on February 1, 2010


Also, if your income from such savings is less than £2000 you will be exepmt from paying tax on it if you are non-domiciled (without having to pay the £30,000 fee)
posted by london302 at 10:02 AM on February 2, 2010


To elaborate my point "the new £30,000 annual remittance basis charge will apply to you if you are resident in the UK in 2008/9 and have been resident in the UK for at least 7 of the previous 9 tax years and have annual unremitted foreign income and gains of more than £2,000."
posted by london302 at 10:09 AM on February 2, 2010


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