Non residents and tax on UK bank accounts

Non UK residents often still retain UK bank accounts. A common question is whsther this opens the doors to any UK tax liability. In itself having a UK bank account would not involve any UK tax, however, of crucial importance is the source of the underlying funds. If, for example, you receive payments in respect of a UK employment or are engaged in a UK trade, the receipts to the bank account would clearly be within the scope of UK tax. If however, you are based overseas and have no UK source income, the fact that you received income to the UK bank account should not crystallise a UK income tax liability. Any interest earned on the funda in the account would usually be subject to UK income tax at source. However as a non ordinary resident you could elect to receive any interest free of UK tax being deducted. In terms of inheritance tax though, the position is slightly different. If you're a UK domiciliary you will be subject to UK inheritance tax on any UK bank balance even if you're a non UK resident.