UK bank account, UK taxation on Winnings
I've read on numerous articles that winnings from betting are tax-free (in the UK). Does this mean that a UK-based bank account will have zero risk from the tax-agency if I just transfer my winnings to it?
Do you need to fill out a special tax form every year to the UK gov't for any extra cash deposited in the UK bank which are in fact your winnings? Or another way to look at it, does the bank + UK government let you transfer anything you wish [MB to UK Bank and UK Bank to MB] with complete ease and zero risk of freezing funds?
Some countries will impose tax on your gambling winnings... so if anybody can confirm to me about UK banking + UK taxation policies, I would appreciate it.
UK banking has another advantage, it seems that UK bank transfers [UK Bank to Bookie and Bookie to UK Bank] are completely free of charge to most UK-based and some non-UK based bookies... please confirm this anyone?
Sounds like you are not a UK resident?
Whether you get taxed on gambling wins will depend on where you have to pay tax. You would need to check out whether the tax legislation that applies to you allows you to keep gambling winnings in a UK bank account tax free. If they do, you will then have to think about how to (eventually) spend the money in the UK, or transfer it legally to another country. It is conceivable that you would have to pay tax (in the destination country) if you transfer the money, unless you have already paid tax, and there is a double-taxation agreement that protects you from having to pay tax twice.
I am flexible. I have triple-citizenship.. lol. anyhow, I'm only concerned about UK now. I thought a UK-based bank account has local laws applying to it. This was my question. Please let's not try to mix up other countries into it. It's complicated as it is.
Where I am currently, I hold a bank account as a foreigner (I registered it with my other passport, yes that is legal).
For example in EU countries in general, there is a law I heard of that says any money transaction over 15,000 euros obliges the bank to report it to the local government tax agency which then has the discretion to ask bank account holder for further investigation about where the money is coming from.
What I'm asking for is strictly UK-bank related. I will not be moving the money away from the UK bank to a bank where I am currently residing. What for?
I am strictly talking about a UK-based bank which will be used as a base to connect to Moneybookers and so to reduce fees, etc.
I am speaking about strictly UK-banks and the way of functioning about funds transferred from MB to the bank and the other way around.
I see a lot of people read the thread but are silent about it... what's the big deal? people from UK should be able to answer my first post in this thread
If anyone here knows but is shy, please do me a favour and send me a PM.
It's something of high importance , not only to me but other non-UK residents.
The thing is, I am not asking about whether or not I can open a UK bank account. Let me do the worrying for that. I am also a Canadian citizen so there is no need to discuss this matter, opening a UK bank account should not be a problem.
The question, I repeat again, is about the way UK policies act towards gambling and taxation on the funds transferred in its banking system.
I read in several places online that UK government does not tax your winnings on gambling. Now is that true?
Etc.. etc... please re-read my first post, I hope this makes my questions clearer. Let's not dance around and ask which countries we are from and other less important questions. The matter of the fact is, that UK banks seem to be of great value because of quick Moneybooker to UK bank transfers with zero fees.
This is especially good for a non-UK resident who CAN open a UK bank account and who holds MB in British Pounds (obviously to maximize his profits).
So what you are saying is that transferring from one Bank account in one country to another Bank account in another country means you are likely to pay tax on that transfer? Well... they let's say this happens, how can your local country check where your money came from? Would you really need to mention to them that you made it on gambling? How would they verify?
Originally Posted by brillo
This is all confusing to me. What's the problem with transfering money from one bank account to another...
Last year I transfered large enough sums of money from one country to another, and nobody asked me about it. On top of that, I used a wholesale currency-trade service to exchange money at low fees and they transfered it to the other country's bank account.
Nobody asked me about the money, it was MY money. And that's how it should be.
My view is, the more a government monitors and taxes money transfers, the less freedom you have with your OWN money and then it's up to you if you choose to live in a country like that.
As I understand it, you would pay no tax on you bank balance, you may well have to pay tax on any interest that the bank gives you each year. You can avoid this, by filling out a form and declaring that you are not a UK tax payer, but the amounts involved are very small anyway, so may not be worth the hassle. Last time I checked I had about £1300 interest on an account with £50k in it, and I think I had to pay about £300 tax.
The other point about tax on gambling has been posted many times. But once again for those that dont know, there is no tax in the UK on winnings from gambling. No ifs, buts or maybe"s, NO TAX IS PAYABLE.
However this is not the case in some Europeon countries, if you reside in one of thoses countries, they may take a dim view of moving your money to another country, to avoid paying what you owe, thats if they find out of course.
The other thing to consider, if moving large amounts of money from one country to another, may cause problems with the athorities, if they think it could be money laundering, or terrorist related, they are hot on these things these days.
Beating Bookies since March 2006
Yes that is true.
Originally Posted by mark01
Have a plan and stick to it
I read your post early this morning, and i'm from the UK, but tbh i didn't didn't know the answer, hence my thanks to brillo for his reply.
Originally Posted by mark01
I don't think it's fair or reasonable for your to expect people to know the ins and outs of transferring presummably quite large amounts of money between UK banks and banks in ........ - we don't even know where, just because they are UK based. It's likely the rules will be different if the other bank is inside or outside the EU.
By all means ask for help and advice on this forum - that's what it's about, but you almost seem to be demanding people tell you what's what on this very complex issue.
Perhaps your questions would be better addressed to the bank which you hold your UK account with - surely they would be able to give a definitive answer.
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It doesn't matter that your winnings go to an UK bank account. You have to follow the tax regulations of the country where your official domicile is.
There are so many issues brought up by your scenario that we could be here until next year debating them...
On UK tax your issues will depend on whether you are resident in the UK, ordinarily resident in the UK and domiciled in the UK (or a mix of these).
As a UK resident you are required to self assess on your worldwide income through the completion of an annual tax return. As gambling winnings are tax free you would simply include this as non taxable income. Banks have an obligation to withhold basic rate tax from any interest receivable on your bank account balance - you can claim this back if you are not paying tax or pay an additional amount through self assessment if you are a higher rate tax payer.
If you are not resident in the UK then generally you only be subject to tax on any earnings arising in the UK (but not from gambling of course as it is tax free).
There is a mass of detailled tax legislation for non-domiciles who live in the UK but their main aim for is to hold and keep money earned abroad outside of the UK as once it is brought in UK income tax will be payable.
On money laundering there is a risk that a banks controls will highlight one or a series of large transactions in an otherwise dormant or everyday account and freeze an account pending investigation. The regulations would strictly apply if there had been interest accrued on these balances that had not had tax withheld, you knew this and did not declare it on a self assessment return (as they would represent the moving of moneys arising from the crime of tax evasion).
There is nothing to stop you moving capital between EU banks under the freedom of movement capital provisions of the EU treaty although that is not to say there will not be any tax issues to consider from doing this.
Some banks will charge for certain money transfers but in general UK banks chose to make their money from other sources and so there is usually free options available.
I believe it is irrelevant where in the world you have a bank account and if that country has legislation that taxes (or does not tax) gambling.
I believe your residency/citizenship determines whether you may need to pay income tax, be it from savings interest, inheritance, rent, salary, lottery winnings, etc. You have to do a self-assessment/declaration depending on the criteria set out by that country's income tax legislation.
I know some US Citizens working full-time in the UK, paying UK income tax and having UK bank accounts and they still need to declare to the US Inland Revenue Service all their income and then it is assessed whether or not they need to pay income tax in the US or not. There are dual taxation laws in place to prevent a person being taxed in two or more countries but I believe that this is a bilateral agreement between two countries.
In the EU, it is a different story. As Borussia says, you need to pay income tax in the UK if you are resident or ordinarily resident or possible a mixture. I'm not exactly sure what defines resident or ordinarily resident. I do know that if you spend more than 180 days in any member of the EU then you are subject to income tax legislation of that country. So, for example, if I lived in the Germany but travelled to the UK for work for 5 days a week, then if I spent more in total more than 180 days in the UK, I would be subject to UK income tax legislation. It is irrelevant if I was being paid in Euros from a German company to a German bank account or earned interest from a savings account in Spain. Both need to be declared to HMRC and then they will be relevantly tax in accordance with the legislation.
I actually have been in a situation where I have not been in any country for more than 180 days in a tax year i.e. I was in one country for 150 days, another for 95 and another for 120 but I never pursued trying to reclaim tax as I think it would have gotten messy and then the taxman would know all about me and keep asking questions in the future.
If it were as simple as just putting money in a bank account in a country that do not charge tax on interest earned, do not tax income from inheritance earned or do not tax earnings from gambling, or any other source of income then everybody would just do that.
I would suggest you talk to an expert on income-tax legislation for whichever country you reside in to assess your situation and determine the best way to pay the least amount of tax, which appears to be your (and possibly everybody else's goal).
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