Can I transfer overseas wealth to the UK without incurring tax?

I am a dual UK and Australian citizen who recently inherited money from my father in Australia. I want to bring the money over to purchase a flat for my son in London.

What are the tax implications on both the inheritance and on the transfer of money into the UK, and on the money that will be donated to my son? I am already the part-owner of a house in London.

Christopher Groves, partner at law firm Withers, says the good news is that there should be no tax implications either in the UK or Australia.

Unlike the UK, Australia does not impose an estate tax or death duties, so if your inheritance was in Australian dollars you should not have suffered any tax charges in Australia as a result of your father's death.

The UK does not impose any inheritance taxes on the receipt of a legacy as it assumes that tax has already been paid by the estate of the deceased. But as a UK resident, you will have been subject to UK income tax on any interest earned on the legacy since you received it, since the UK taxes income on a worldwide basis.

The only exception to that would be if you are not domiciled in the UK because of your Australian heritage. In that case you may be electing to pay tax on a "non-dom", or remittance basis. If that is the case, you will be subject to tax only on overseas income or gains remitted to the UK.

Assuming you inherited Australian dollars rather than sterling, you or your son may want to convert them to sterling at some point. Again, there is good news here as, since April 6 2012, capital gains arising on the conversion of foreign currency - for example, if the currency in question has appreciated against sterling since it was acquired - are not subject to capital gains tax.

If you wish to make a gift of cash to your son, you can do so without any immediate tax consequences and - providing you survive the gift by seven years - there is no liability to inheritance tax (IHT).

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

If you do this, you will not be treated as having made a gift to your son; instead, for UK inheritance tax purposes, any legacy would be treated as if it had been received directly from your father and there would be no liability to inheritance tax on your death. You will still be liable to income tax on the income earned on the money since you received it up to the date of the Deed of Variation.

However, there are tax implications if your son is under the age of 18 and you want to buy him a flat as a buy-to-let property. In that case, rent received while he was under 18 would be taxable as yours. This would be the case regardless of whether or not you entered in to a Deed of Variation.

John Balazs at Balazs Lazanas & Welch also contributed to this answer

I am thinking about moving overseas. Where can I find impartial advice on Qualified Registered Overseas Pension Schemes (Qrops)?

Paul Taylor, chartered financial planner and chief executive of advisers McCarthy Taylor, says that finding impartial advice on transferring a UK registered pension scheme to a registered overseas pension scheme is more difficult than it may appear.

However, the Personal Finance Society has launched www.findanadviser.org which allows clients a simple way of finding an adviser near to their home. Firms do not pay to be on this register.

You may prefer to use www.unbiased.co.uk which allows them to filter their requirements, such as "advice for expats", so that they can reduce time in finding the right adviser.

It is important you check that any firm you consider using is registered with the Financial Conduct Authority (www.fca.org.uk/register, or call 0800 111 6768) and holds the appropriate pension transfer qualifications. It would also be preferable for the firm to be Chartered by the Chartered Institute of Insurance, due to the skill level involved with Qrops.

We would recommend that anyone considering the transfer of a defined benefit or personal pension scheme proceed very carefully as this is open to abuse.

The advice given is specific to the questions posed. Neither the FT nor the contributors accept liability for any direct or indirect loss arising from any reliance placed on replies.

My elderly father has a bank account in Switzerland after years of working there and I am worried that he is ignoring the possible penalties this could incur under recent tax evasion measures. I am in need of advice in how to resolve this situation - can he disclose it to HMRC without severe consequences?

You can leave answers using the comment facility at the bottom of this article online, or email [email protected].

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation