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Old 15th February 2010, 06:13 AM   #1
jemswillam
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Default How best can I move my Mother's life saving from Spain back to the UK.

Hi All, Pse help:

My Mother is now joining the hoards of ex-Pats returning from Spain suffering from the weak Euro, she has sold her small house and that money is now her life savings. I live in Cyprus and am wondering what the regulations are with transferring money (circa £25,000).

Q1. Will she be taxed in the UK?

Q2. Will she have to explain where the money has come from to her bank?

Q3. She may want me to hold the money in either my Cypriot acct or my English acct so Q1 & 2 would also apply to me, would I be expected to pay some gains Tax on her money?

Q4. What is the best and safest way of transferring the money from Spain i.e. Swift bank transfer or should I use a private company like HiFix?

Thanks in advance.
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Old 26th February 2010, 11:02 AM   #2
Sagitario
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Default

Quote:
Q1. Will she be taxed in the UK?
Assuming that the referred to capital sum is from the sale of your mother’s sole domestic property and furthermore, she does not retain any beneficial financial interest and / or ownership claims on additional residential properties (be it in Spain or the UK) then the liability for UK Capital Gains on such a sum should not be a factor.

I refer you to the relevant HM Revenue & Customs web page outlining UK Capital Gains liabilities on property transactions.

http://www.hmrc.gov.uk/cgt/property/basics.htm

Quote:
Q2. Will she have to explain where the money has come from to her bank?
Being that the transferred capital is emanating from a source outside of the UK then due to rules governing UK money laundering issues some kind of written explanation may be required as to its origin.

I refer you to the relevant HM Revenue & Customs web page governing the December, 2007 responsibilities of UK financial institutions concerning the matter. Being that every UK bank is now required to have in place a dedicated “money laundering reporting officer” whose duty it is to review such possible transactions as to their legality.

http://www.hmrc.gov.uk/mlr/getstarted/intro.htm#2

Quote:
Q3. She may want me to hold the money in either my Cypriot acct or my English acct so Q1 & 2 would also apply to me, would I be expected to pay some gains Tax on her money?
In terms of UK common law, such a type of transaction would be of a personal nature between parties concerned. In as much as without a written agreement, your mother would be effectively “freely gifting” you the money to do as you see fit. While technically the ownership of the money would have been “freely gifted” to you by your mother, without a written agreement to the contrary, any incurred UK tax liability would remain the responsibility of your mother.

I can make no comment concerning the situation as it would apply in Cyprus.

Quote:
Q4. What is the best and safest way of transferring the money from Spain i.e. Swift bank transfer or should I use a private company like HiFix?
It may not necessary be the best but the safest way of executing the one-off transference of funds is directly between banks within the SWIFT network. However, you have no control over the currency exchange rate being applied at the time … very much a case of take or leave it.

What the likes of a HiFx online account afford the user is the ability to fix an exchange rate for a set period of time. The advantages being the interbank transference of funds, originating from a user's HiFx online account, at a predetermined exchange rate during regular intervals until such funds are exhausted. Ideal if a user is funding a purchase or service on a staggered or pay-as-you-go basis. Effectively, what a user is doing is buying a foreign currency (to be held on deposit in a user's online HiFx account or such like) in advance of an interbank transference(s) being authorised by a user.
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