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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5142
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a property in Indonesia which has increased in value

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I have a property in Indonesia which has increased in value quite considerably. I am hoping to sell soon for approx. 200,000gbp, not sure of buyers nationality yet. I am not a home owner in uk. When funds transferred here to buy property, What are the implications for tax in the uk
Thank you for your question.Please clarify for me -are you a UK National?are you UK resident for tax purposes?do you file a tax return? Many thanks
Customer: replied 2 years ago.
I am UK resident, previously when self employed I filed tax return but not for past two years. I have been out of the country, UK, and based in Indonesia for past two years. I returned to UK in November 2015.The deeds for the property are not in my name, I have used a nominee, Indonesian national who via me will pay the 5% property tax in Indonesia. However the funds for the property will come direct to me maybe from Australian national.
Thank you for your prompt reply.As you are a UK resident , you are normally taxed on your worldwide income and gains arising in the tax year.The property is in your name and you are the beneficiary of it. Any gain you make from sale of this property in Indonesia would be chargeable to UK capital gains tax.You would claim gains annual allowance against the gain and the balance would be taxed at CGT rate of 18%, 28% or a combination of both depending on your total taxable income in the tax year the property is sold.Having said that you would claim foreign tax credit relief against any tax suffered in that country under the double taxation agreement between the two countries on the gain from sale of property. It does not matter who is remitting the funds to you in the UK.You would claim foreign tax credit relief by completing supplementary pages SA106- Foreign in addition to completing the main tax return. The gains would be reported on supplementary pages SA108-Capital Gains summary. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 2 years ago.
if the property being sold has been my home and I am using the money to buy my first property in uk , am I not excluded from capital gains tax.
Thank you for your reply.If the property in Indonesia was your only property and you used it as your main residence for the period you owned it, you would claim private residence relief against the gain and no CGT payable.It is not what you are going to do with the proceeds that determine whether you pay CGT or not but the gain and any reliefs available against it that determines the tax position. I hope this is helpful and answers your question. and other Tax Specialists are ready to help you