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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15942
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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There. I am a Spanish living and working in London. Last

Resolved Question:

Hi there. I am a Spanish living and working in London. Last year my wife (also Spanish) inherited a property in Spain. We then sold the property and transfered the proceeds from that sale to our joint account in the UK.
Are we liable to any income tax from that repatriation of funds? Should we declare it in our self assessment report?
Thank you very much
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.
Assuming that your wife was tax resident in the UK when she sold the property, then she should disclose the disposal in a self-assessment tax return. If she is not registered for self-assessment she can register using a form SA1, either online or on paper. Look here for both forms of the SA1:
https://www.gov.uk/government/publications/self-assessment-register-for-self-assessment-and-get-a-tax-return-sa1
If she has to pay CGT in Spain, she should be able to offset that against any CGT liability in the UK. The cost of the property for UK CGT purposes is the value of the property when she inherited it. So, if it was sold soon after she inherited it, there may not be much of a gain.
Married couples complete separate tax returns in the UK. Assuming your name was never added to the property deeds, you should not disclose any of the gain in your tax return, notwithstanding the fact that the disposal proceeds were paid into a joint account.
As your wife is not UK domiciled, had she left the proceeds abroad, she would not have to pay CGT in the UK until she brought the money into the UK. This is the remittance basis of assessment.
I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
Thanks TonyTax. Does your statement around..."Married couples complete separate tax returns in the UK. Assuming your name was never added to the property deeds, you should not disclose any of the gain in your tax return, notwithstanding the fact that the disposal proceeds were paid into a joint account"...still hold if I the wire transfer from our spanish joint account was in my name (even if it went to a joint UK account)?Also, you are focusing on CGT. Would you say that the repatriation of funds could by HMRC be considered as income and therefore liable to income tax?Thanks
Expert:  TonyTax replied 2 years ago.
If you didn't have a share of the property ownership, the gain or part of it is not yours for tax purposes.
No, it's a capital gains tax situation and any gain won't be taxed as income.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.
Thank you. I have another question but IU will ask separately
Expert:  TonyTax replied 2 years ago.
Thanks for accepting my answer. If you would like me to answer your next question, please ask for me.