bobxyz999[at]yahoo.com (Bob Brown) wrote

- quote -

Mr. Brown:

The answer depends on your risk tolerence.

The middle-of-the-road approach would say that having other
accounts with the bank does not cause a problem at all
because the source of the remittance (the one particular
account) has been closed.

The conservative approach would say that all debt owed by
the bank to you (your savinga are a loan to the bank for
which they are paying you interest) is to be treated as one
lump sum, no matter how many accounts you have divided it in
to with that bank. Since the bank still owes you money in
the form of the other accounts, the source has not been
closed, thus making the remittance taxable. From what I
have read, many UK advisors follow this conservative path.

The agressive approach says that even if you only had the
one account, you could transfer the money into a different
account and then remit the money from the second account.
Since it has yet to earn interest, none of the remittance
would be considered taxable. Again, from what I have read,
Inland Revenue does not seem to mind this technique. That
being said, I would not want to be the test case for a
Revenue Agent.

For conservative folks, tax-speaking wise, then the prudent
path may be to trasnsfer the funds to a completely different
bank (not a different branch of the same bank) and then
remit the funds to the UK.

Here are some links for your reading pleasure.

www.itpa.org/open/archive/docker.rtf
www.amicorp.com/Aminews_Q3_2003.pdf

Please remember that I am not giving you specific advice to
take any of the above paths. If you have an Australian or
UK chartered accountant who would prepare a UK return for
you, I would ask them for advice.

Regards,

Peter C. Gatto, CPA

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================================================== ==========
Moderator's comment:
This newsgroup is open to univere-wide tax questions.
The only limitation is that the questions need to be
written in English so that I can read them. We do not
get many non-US tax questions. I hope there is a
knowledgeable practitioner out there who can assist
Mr. Brown.
================================================== ==========

I am resident in the UK but domiciled in Australia.
As such, any interest I earn from a bank account
outside the UK is not taxable unless I remit it
to the UK.

I read somewhere about "source-closing rules" for
non-UK-domiciliaries, where even if interest is remitted
to the UK, it is not taxable if the source (i.e. the
bank account that paid the interest) was closed in an
earlier tax year.

For this purpose, would a source be considered closed if
other accounts were still held with the same bank?

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