Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Was this property in India the only domestic residence owned by you? In what accommodation do you live in whilst resident in the UK?
Once I know this I can address your question fully.
You will be liable for UK Capital Gains Tax (CGT) on the gain made on the sale of your Indian property. You have an Annual Exempt Amount (AEA) of 11.1K to offset this gain. This gain may also be liable to Ind***** ***** Term CGT [20%], however, under the Double Taxation Treaty between the UK and India any tax paid in India is allowed as a tax credit against a similar liability in the UK.
Bringing the money realised from this sale to the UK presents no problems, just warn the incoming bank of the amount and its source to preclude any money laundering inquiries a large transfer might attract.
The UK has no gifts tax regime. Thank your lucky stars you don't live in France where gifts tax kicks in at 5K Euros. The gift to you son is therefore tax free, but does create a Potentially Exempt Transfer (PET) in your Inheritance Tax (IT) affairs. PETs run off at a taper over seven years and in the event of your decease within this period are added back to your estate for IHT purposes. PETs are the first to suffer IHT and if your estate is insufficient to meet the IHT on the PET then the liability cascades down to the beneficiary for immediate payment. IHT does not, or course, start until your estate reaches 325K. The classic defence against a PET is a reducing term life insurance policy.
I do hope that you have found my reply of assistance.
You should normally use the HMRC conversion rate, however a historic record can be found here:
You use the rate applicable to the time of purchase or sale.
Not a scrap, it is the date of sale which triggers the CGT liability in both countries..
For tax purposes, the date of the sale.
Unfortunately, yes; the GBP is weak at present following the Britexit referendum decision. Of course, if it picks up you could make a profit.
Whichever way the exchange rate cat jumps will male a difference to the numbers.
Possibly, but that is an Indian Taxation matter and this is an essentially UK tax advice site.
The Inland Revenue ceased to exist many years ago on amalgamation with HM Customs and Excise to form HMRC. If you state when paying him the 50K that it is a part repayment of the debt owing to him then it will be outside the scope of UK taxation and no PET will be created. I would suggest that you put that in writing when paying him.
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Then when making the gift write to the beneficiary telling him the payment is a gift. Keep a copy so your executors/administrators will know that a substantial lifetime gift has been made. It can then be taken into account if the PET has not run off.
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