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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I need advise and procedure in money

Resolved Question:

Hello,
I need advise and procedure for bringing in money from abroad to the UK. I am selling my property abroad and want to purchase property in UK. I need clarification on the Tax issue. Thank you.
Regards,
Naveen
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

Please advise if you are UK resident for tax purposes.
Are you a UK National?

Was the property being sold ever your main residence before you came to the UK?

Many thanks

Customer: replied 2 years ago.

Thanks for the quick response. I have Indefinite Leave to Remain status in the UK(Permanent Residence). I have not yet taken Citizenship.

regards,

Naveen

Expert:  taxadvisor.uk replied 2 years ago.
Naveen, thank you for your prompt response.

When you are UK resident you are normally taxed on the arising basis of taxation. This means that all your worldwide income and gains will be taxable in the UK.

Therefore, even if your foreign gains have already been taxed in another country they

will still be taxable in the UK and you must declare all of your foreign gains on your tax

return.

You claim foreign tax credit relief against tax suffered on that gain in India.

You declare your foreign gain and tax suffered by completing supplementary pages SA106 - Foreign and SA108 - Capital gains summary in addition to the main tax return.


If the property being sold has been your main residence at any point before you moved to the UK, you would be able to claim private residence relief for the period the property was your main residence.

You should alert your bank in the UK of the impending transfer of funds to comply with Money Laundering Regulations.

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Thanks for the answer. But I am not able to understand why I am liable to worldwide gains Tax as I am not a citizen or domiciled in the UK. I have read else where that a person with domicile other than UK does not get taxed for gains in their domiciled country?

Expert:  taxadvisor.uk replied 2 years ago.
Naveen, thank you for your reply.

In your opening statement you stated "bringing in money from abroad to the UK. I am selling my property abroad and want to purchase property in UK."

You are correct that UK residents who are not domiciled in the Uk may not have to pay tax on foreign income and gains if
a) the amount is less than £2,000
b) you don't bring them into the UK

This is not the case in your scenario.

Secondly, the alternative to paying tax on arising basis is to pay a charge on remittance basis and this could be well above the tax otherwise.

More information on this can be found here (look at if your income is £2,000 or more)

https://www.gov.uk/tax-foreign-income/non-domiciled-residents


I hope this is helpful and answers your question.
Customer: replied 2 years ago.

Thank you for the reply.

If I was to be taxed for the money I am bringing into the UK, which would be GBP: 100,000, how much will I be taxed either as gains or remittance basis?

regards,

Naveen.

Expert:  taxadvisor.uk replied 2 years ago.
Naveen, thank you for your reply.

Assuming you pay tax on worldwide gain and the gain is £100k, your maximum CGT would be (100,000-11,100) = 88,900 x 28% = £24,892 less tax suffered on this gain in India.

Under remittance basis, if you have been resident of the UK for at least 7 out of the previous 9 years then you charge would be
calculation as above, plus an annual charge of £30,000.

I hope this is helpful.
Customer: replied 2 years ago.

Thank you for the reply.

I am selling a land my only property and buying a home as my primary residence in UK which will be my only residence in either country. Can I get any relief based on this criteria?

regards,

Naveen.

Expert:  taxadvisor.uk replied 2 years ago.
Naveen, thank you for your reply.

As you are selling land only and not property that was your main residence, there is no relief available, I'm afraid.

Also, if you were to go remittance basis route, you would lose your gains allowance as this is not available to those who claim remittance basis.

Confirmation of this can be found in HMRC manual RDRM32050 here

http://www.hmrc.gov.uk/manuals/rdrmmanual/rdrm32050.htm

I hope this is helpful and answers your question.


If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

Customer: replied 2 years ago.

Thanks for the reply.

So there is no means of relief for my scenario?

regards,

Naveen.

Expert:  taxadvisor.uk replied 2 years ago.
Naveen, thank you for your reply.

As it is sale of land and not property, you can't claim any relief other than your capital gains exempt amount, I'm afraid.

I wish I could give you more favourable news.

I hope I have been helpful.
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