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bigduckontax, Accountant
Category: Tax
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I have been resident overseas for very many years and now

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I have been resident overseas for very many years and now considering returning to live in England. If I do return, please advise
a) Would any overseas rent simply be added to UK income?
b) Would any capital gains if I then sold a Mexican property be the same as for a UK property? Would there be any relief if it was my main home?
c) Overseas investments : If left in place and income declared is this simply added to UK income, or is there a tax advantage in moving to UK based funds? Would I be liable for capital gains if I sold the overseas funds after returning? From a tax point of view, is it better to move the funds to the UK while still overseas resident?

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

a) Yes, but any tax paid locally would be allowed as a tax credit against your UK liability under the Double Taxation Treaty between the UK and Mexico.

b) Yes, they would, but again the Double Taxation Treaty would protect you. As far as the UK ia concerned were it your sole or main domestic residence Private Residence Relief (PRR) would apply which relieves Capital Gains Tex at 100%.

c) Yes on all points, it would probably be safer and more flexible to move investments to the UK.

I do hope that you have found my reply of assistance.

Customer: replied 6 months ago.
Thank you. Regarding the tax treaty, suppose I paid 5% income tax in Mexico but liable for 20% in the UK, does this mean I would pay HMRC 15% on any sum above my personal allowance?

Well yes, effectively, you would claim the Mexican deduction on your your self assessment tax return.

Please be so kind as to rate me before you leave the Just Answer site.

Customer: replied 6 months ago.
Thanks. I won´t forget to rate you. 2 more questions :1. just to be clear, the tax advantage of having funds in UK rather than overseas only occurs as long as I repatriate them before I return myself. IE in the tax year previous to my return? 2. If I land a bunch of money in a UK fund while still non resident, I will presumably have to explain where it comes from (no problem) but will the money be subject to any deduction of tax at that point?

1. No, it does not make any difference, repatriating.

2. No, but warn your bank of incoming funds and their source to preclude any money laundering inquiries a large sum might otherwise attract.

Customer: replied 6 months ago.
Sorry - to clarify ans 1. Are you saying there is no UK tax liability if I sell funds and move them to UK either before or after tax year of my return?

Sorry, my reply was only in respect of funds sold before departure. If you sell them on your return there may be Capital Gains Tax (CGT) liabilities.

Customer: replied 6 months ago.
Thank you. I think I now have the info I need. Will go ahead and rate your very useful response.

Delighted to have been of assistance.

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