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Sam
Sam, Accountant
Category: Tax
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I am a Tier 2 (General Migrant) foreign worker living in the

Resolved Question:

I am a Tier 2 (General Migrant) foreign worker living in the UK for 1 year. I am planning to apply for a mortgage and using the money from the sale of the property I have from my home country (Philippines) as a deposit.
I wanted to ask if there are any tax implications on bringing the money to the UK (around 50,000 gbp) once my foreign property is sold? Please note that I would have to pay capital gains tax in the Philippines when I sell the property.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.

Hi

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

There would be no tax implications on just the act of bringing this money into the Uk but there may be a capital gain position on selling a property that is not your main residence (at the time of sale)

But if this sale is taking place within 18 months of this having been your main residence AMD had been your main residence from the date of purchase until that date - then there will be NIL capital gains arising.

Let me know if you require any further assistance

Thanks

Sam

Customer: replied 1 year ago.
As it has been more than 20 months now since I left that property in the Philippines, that means the capital gains position may be applicable to me then. Are you able to expand more on that please? What would be the estimated percentage of capital gains position I need to pay here in the UK and how do I file or declare that? Given that I would also need to pay capital gains tax in the Philippines, would a percentage of that be offset somehow?
Expert:  Sam replied 1 year ago.

Hi

Thanks for your response - and whilst I have expanded on how capital gains works - this was over and above your questions request - but as this is your first time on Just Answer, I have answered on this occasion

Then you will have to pay tax on this money In the UK through capital gains -

This is formed by the sale price less the acquisition cost - which forms the initial gain.

from this initial gain you can deduct the costs to buy and sell (such as legal fees) and also the cost of any capital improvements such as a new kitchen or bathroom.

Then tax reliefs are considered to take into account that this was your main residence - so the time you lived here plus the last 18 months of ownership/total period of ownership x gain forms the exemption and then you are due private lettings relief if you then let out the property and declared all rents to HMRC (this can allow a further £40,000 of relief)

Finally you would have an exemption of £11,000 and if then there is any gain left over this is charged at 18% or 28% or a mix of both (this is dependent on your level of annual income)

Then finally any capital gains you have paid on the Philippines can be used to offset against the Uk tax position

You should advise HMRC as soon as this sale takes place so they can set you up for self assessment tax (where you will complete a self assessment tax return) and you can then declare ALL income including this gain -

If you sell before 05/04/2017 - then you will complete a self assessment tax return after 05/04/2017 for the year end 2017 - and any tax due paid no later than 31/01/2018.

Do let know if I can assist further - on the information I have supplied

Thanks

Sam

Customer: replied 1 year ago.
Thanks Sam. Right now I'm on PAYE because I am employed. If the sale proceeds, as I understand from your statement, I would have to do a separate self-assessment for my income this year. I am also assuming an accountant can do this on my behalf (i.e. assist in calculations etc)?
Expert:  Sam replied 1 year ago.

Hi

Thanks for your further question (though it would be very much appreciated if you would rate me for the level of service I have supplied. or click accept)

The self assessment would take your employment into account along with any capital gain position - as its a total declaration of income

Thanks

Sam

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