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  • Mortgages & Finance

    UK ex-pat - how prove funds source?

    Hi there,

    Thank you in advance for reading. I'm a UK expat artist, living/working in China for 10+ years. I've got a little savings & want to purchase in the UK. Somewhere in the north for under 100K cash.

    I'm mainly anxious about regulations on proving source of funds. My work is irregular and self employed. On research, I know the bank will need to be called in advance, to explain funds will hit the account from overseas & that I should do what they ask with documents. However, for the solicitor, what I'm I likely to need to show?

    Contacts/invoices to my customers for work done?
    My wife is in education in China, should her payslips also be proof?

    I obviously have no idea here and would appreciate some pointers.

    thanks / jay



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    This will depend on the bank. Often with Chinese residents, people are using Chinese located banks to fund so this is done with usual Chinese evidence. In your case if you are planning to use a bank, the biggest issue is probably not the proof but them understanding it as it is not in English. Usually banks won't accept foreign earnings anyway. They would want official paperwork (eg tax office, accountant's opinion) not your invoices.

    However you are looking at a BTL so selecting a bank which accepts ex-pats and does not have income thresholds. A few come to mind.

    If of course you are not referring to a bank for lending purposes but for just receiving overseas funds then this will be a matter of liaising with your bank. I know the exchange controls in China are generally considered challenging.

    If this is the start of a plan to replicate then you should consider whether using a company is worthwhile. SDLT will not be different but if the taxable profits exceed your personal allowance then you suffer 20/40% on the excess whilst in a company the tax rate would be lower and there would be no tax on paying dividends to China (I believe). Given what you have said I think you are not looking at a start of Empire HelloBonjour and so buying in your personal name is probably best.

    Please PM/email me if you need any help.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022


    "In your case if you are planning to use a bank...."
    Is there another option?

    All the funds are in Hong Kong, HSBC, it's safer and easier for international transfers. 
    Thus, I can get English documents. Exactly what though? I can get a public accountant to provide a letter?

    BTL. This isn't for buy to let. I've no family or footing in the UK and it's time to fix that. 

    " if the taxable profits exceed your personal allowance then you suffer 20/40% on the excess whilst in a company the tax rate would be lower and there would be no tax on paying dividends"
    Tax has already been handled in Hong Kong. I'm more concerned in what UK bank, UK conveyancing need to be shown for proof of funds.

    (I replied to you by email a few mins ago)

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