Does ILR need to declare when transferring money from the UK back to China?

Does the salary taxed in the UK need to be declared when it is transferred back to one's own account in China? According to Article 8 of the current "Implementation Rules for the Statistical Declaration of International Balance of Payments through Banks," the bank reporting, individual filling, and the exemption from declaration under the limit are distinguished. By separating these three parts, it is clear at which step the procedures should be handled.

Holding a UK visa or ILR does not, by itself, determine tax residency status on both sides.

Basic information, first verify the payee.

The text at the beginning requires banks to report "basic information." When it comes to remittances, please first confirm with the domestic receiving bank which currencies the account can accept, and request the recipient's name spelling, account number, bank name, and required bank identification code. In the UK, a bank or a remittance institution with appropriate qualifications should provide identity proof, address, and source of funds as required. For salary savings, prepare pay slips, P60 annual tax forms, and corresponding deposit records; for living expenses for parents, prepare family relationship documents and usage explanations. The list of materials is confirmed by the handling institution, and the P60 cannot alone prove the full source of the current balance.

The payment method must be determined before payment: either transferring the British pounds into domestic foreign currency accounts and then converting them, or receiving the RMB directly through supported channels. According to the price transparency explanation of FCA, when comparing prices, it is necessary to check the exchange rate difference, remittance fees, and possible fees charged by the intermediary bank and the receiving bank at the same time.

The statement "only 50,000 USD can be remitted back each year" is too general. The 50,000 USD stipulated in Articles 54 to 56 of the "Guidance on Current Account Foreign Exchange Business (2020 Edition)" refers to the annual convenient exchange quota for settlement and foreign exchange, and cannot be directly regarded as the upper limit for incoming remittances. Chinese residents who meet the conditions for current account income can handle non-quota exchange by presenting identification documents and materials proving the source of funds with transaction amounts. Banks need to separately confirm the conditions for handling foreign currency received and converting it into RMB.

There is no unified number of days for all channels to arrive. Confirm the expected arrival date and supplementary documents before payment; if it exceeds the expected date, use the remittance number to track from the sender's side, and also ask the receiving bank to check whether it is pending processing.

Declaration information, may also need to be filled after the arrival.

The text requires individuals to fill in the "Declaration Information" as specified, including the permanent country of the other party, transaction code, and remarks. When transferring funds between personal accounts or sending maintenance fees to parents, the actual relationship and nature of the funds should be filled in. If unsure about the code, please consult the receiving bank. For foreign-related income that requires individual declaration, according to Article Twelve of the detailed rules, it should be completed within 5 working days after the paying bank pays out or the converting bank converts the currency. It can be handled through electronic certificates provided by the bank or at the counter. Upon receiving the declaration notice, verify the amount, currency, and deadline, and keep the receipt. Also, retain the payment voucher.

The "sent" status on the UK side only indicates the processing status on that side; whether the domestic account has been credited, or whether additional documents are still required, should be confirmed with the receiving bank.

No need to fill in the form, but tax statements still need to be calculated separately.

Article 8's "exemption from declaration under the limit" applies to resident individuals' cross-border payments and receipts with a single equivalent value of up to 10,000 USD. Details in "no filling required": the declaration information in the documents is exempted, but banks still report basic information such as name, identification, currency, and amount. Non-resident individuals are reported by the bank on their behalf according to regulations. Which category of resident status the payee applies for should be confirmed with the bank, and it cannot directly apply the UK residency status.

According to HMRC's public response regarding the transfer of principal to overseas accounts, salary savings that have been legally taxed and transferred to the individual's domestic account usually do not require additional income tax reporting for the transfer. Gifts to family members should also be checked against inheritance tax rules.

The interest generated after the money is left in the individual's domestic account, if it belongs to taxable overseas income in the UK, should be handled according to HMRC's guidance on overseas income for Self Assessment (self-declaration). On the domestic side, the tax status should be verified in combination with the residence, living conditions, and applicable tax treaties. According to Article 7 and Article 13 of the current "Individual Income Tax Law of the People's Republic of China," residents who obtain overseas income that needs to be declared should file the declaration between March 1st and June 30th of the following year. The overseas income tax already paid can be offset within the limit. Prepare the overseas income and tax payment documents, and handle it with the competent tax authority; do not directly take the remittance year as the salary attribution year.

My judgment is that for large remittances, the recipient bank should first confirm whether the documents can support account entry and exchange, before making the payment. When family members are waiting for the money, it's more secure to clarify the recipient conditions in advance, rather than chasing for additional documents after the payment.

This article is for reference only. For specific issues, please consult a licensed attorney.

[Data Source] State Administration of Foreign Exchange: Hui Fa [2022] No. 22, Hui Fa [2020] No. 14; HMRC: Public Response on Transfer of Principal to Overseas Accounts, Guidance on Overseas Income and Gifts; State Taxation Administration: Article 7, Article 13 of the current "Individual Income Tax Law of the People's Republic of China".

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