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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15977
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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UK Tax implication for proceeds from flat sale in India. I

Customer Question

UK Tax implication for proceeds from flat sale in India.

I have recently acquired British citizenship after living in UK since 2006. I have a flat in India which I am planning to sell in near future. It will be subject to long term capital gain tax India (about 20% on gain). I plan to bring the post tax sale proceeds to UK. Please can you advise what would be tax the implications on this. Would it be tax free due to double tax treat between UK & India.

Submitted: 4 years ago.
Category: Tax
Expert:  TonyTax replied 4 years ago.

Can you tell me if the property what ever your main home please. If so, was it ever let?
Customer: replied 4 years ago.

As we live in UK, our main home is in UK. We only have this one property in India which is currently vacant.


Expert:  TonyTax replied 4 years ago.

As a UK resident, you are taxable on your income and gains from wherever in the world they are derived unless you are non-UK domiciled and you choose to be taxed on the remittance basis in which case you only pay UK tax on UK source income and gains and on non-UK source income and gains that you bring into the UK. You can read about the remittance basis of assessment in section 9 of the document here.

If you bring the money from the sale of the flat to the UK, the gain as computed for UK tax purposes will be subject to UK Capital Gains Tax. The first £10,900 of gains you make are exempt from CGT and you will pay tax at 18%, 28% or a combination of the two rates depending on the level of your other income in the tax year you sell the flat. Each part owner of the property will be entitled to the CGT exemption. Any CGT you pay in India will be deductible from your UK CGT liability. Take a look here for more information on UK CGT.

If the property was ever your main home, you will be entitled to a reduction in the amount of the gain which will be subject to UK tax. If it was your main home at any point and it was let, you will be entitled to letting relief which will reduce the amount of the gain which will be subject to UK tax further. Take a look at the HMRC help sheet HS283 for more information.

I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 4 years ago.
Hi again.

I can see that you have read my answer to your question. If you need further clarification, let me know. If not, would you kindly rate my answer so that I get paid for my work. Thanks.