How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4948
Type Your Tax Question Here...
bigduckontax is online now

I have a couple of questions in relation to tax in the UK when

This answer was rated:

I have a couple of questions in relation to tax in the UK when property is purchased in New Zealand and also inheritance & gift tax.
I'm am a New Zealand citizen resident in the UK (i have dual citizenship). I have been based in the UK for over 13 years and have no assets in New Zealand. I have a property in the UK which is currently mortgaged.
My mother is a New Zealand citizen and is still based in NZ. She is just about to conclude divorce proceedings and due to get the money owed to her in January 2016.
My family and I are looking at ways to make this money work best for her, and how best to minimise any affects that 'means testing' may have in later years.
She needs to purhcase a house and my brother is suggesting that this be purchased in my name. The idea would be that my mother would not pay any rent on the property and would be responsible for all the bills.
The idea would be that the divorce settlement paid to my brother (resident in Australia), and the amount for the house paid to me in the UK to faciliate the purchase (in full).
I would like a bit more advice in relation to:
1) Tax implications for me as a UK tax payer
2) Any negative implications from an inheritance perspective especially in relation to capital gains tax
3) Any issues that may result from the gifting of the divorce settlement funds to me to purchase the new property.
4) Anything else you think we should consider
Thanks very much in advance.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Is your mother intending to remain in NZ or come and live with you in the UK?
Customer: replied 2 years ago.
Hi Keith. Thanks for this.
My mother is intending to stay in New Zealand.
To check my understanding of your response:If my mum gifts me the money for the house (say NZD $300k) and I buy the house in my name. She lives in it for 15years and then passes away. I then sell the house for NZD $400k (a profit of NZD $100k).Do I pay the capital gains tax on the $400k or the $100k profit?Also are there any implications for just being given the $300k in the first place?Thanks again.
Gifts are outside the scope of UK taxation. Thank your lucky stars you don't live in France where gifts tax kicks in at 5K Euros! Tax on NZ gifts went out in late 2011. On disposal you will be liable to UK Capital Gains Tax (CGT) on the 100K NZD gain made. Any NZ tax paid will, under the Double Taxation Treaty between the UK and NZ which precludes a transaction being taxed in both jurisdictions, will be allowed as a tax credit against any UK CGT liability. Please be so kind as to rate me before you leave the Just Answer site.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your support.
I should have mentioned that you have an Annual Exempt Amount (AEA), currently 11.1K, to offset any gain. This is an 'use it or loose it' allowance and is not cumulative.