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Sam, Accountant
Category: Tax
Satisfied Customers: 15686
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I hold UK passport and living in UK at this moment. I bought

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I hold UK passport and living in UK at this moment.I bought a property in Hong Kong in 2008 and registry only used my Hong Kong’s Identity Card. Also, the mortgage provider is HK’s bank.I lived in this property until 2017 when I returned to UK.Now, I am planning to sell this property and transfer the money to UK and buy a property in UK.When I transfer the money to UK. Do I need to pay UK Capital Gain Tax? If yes, how much (approximate) I need to pay?Also, the capital gain on this property is approximate 4m Hong Kong dollars (ie £400K).
JA: The Expert's answer will cost $10 to $100, depending on the issue type and time to respond. You'll see the exact amount on the next page and can decide then. It's way less expensive and more convenient than any face-to-face visit. What are the assets or property for this capital gain?
Customer: Property
JA: Anything else you want the Accountant to know before I connect you?
Customer: no

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly


Yes you will pay UK capital gains as you are selling a property that has not been your mian residence for more than 9 months

So what is the gain (In sterling)

How much did you spend on legal costs to buy - and what costs will you have to sell
Did you carry out any capital improvements during ownership like anew kitchen or bathroom etc?

What month in 2008 did you buy

What month in 2017 did you move out

I can then provide you with an estimates calculation

Also is your annual income in excess of £50000 if no then would you mind providing the annual figure



Customer: replied 4 days ago.
The gain is approximate £400,000Legal costs to buy = approximate £4000,
Legal costs to sell = £1500,
Agency costs to sell = £7500
Capital improvements during ownership = £5000,
(Note: we have not keep the receipts for above cost)We bought in April 2008.We moved out in August 2017My annual income is £32000Thanks,Ben


What month in 2017 did you move out and if you have no evidence of capital improvements then they cannot be claimed

You keep referring to "we" was this property is anyone else's name if so what is their current annual income and what percentage so they own (if your spouse then that will be 50%)



Customer: replied 4 days ago.
We moved out in August 2017 and we have no evidence of capital improvements.I and my wife join to own this property (50/50). My wife is zero annual income.We rent this property to someone since December 2017 and rental income is £18000 per year, deduct the tax (ie next income) is £15900 per year.


Do you declare the rental income to HMRC?



Sam and other Tax Specialists are ready to help you
Customer: replied 4 days ago.
no I alredy pay the tax in HONG KONG

Just trying to ring you is the number correct ?




So we discussed the following gain was £400000

You bough April 2008

Moved out Aug 2017

Will sell ( we estimated April 2021)

I did not take into account the capital improvements

First I advised you needed to declare the rental income to HMRC and any tax suffered as this would be liable to UK tax due to your residency here

Then within 30 days of the sale (under the new capital gains regime ) link here

it says UK property but applies to overseas property too

The gain calculation based on no sale date ,not allowing capital improvements and not having declared the rental income (which affects the basic rate band and therefore capital gain rate)

So £40000 less costs to buy and sell of £9000 = £391000 initial gain

You owned this property for an estimate of 156 months and lived there for 112 but also can add on the last 9 months of ownership so relief allowed on 121 months which is called private residence relief so is the exempt part)

so £391,000 x 121/156 = £303276 which leaves £87724 liable to tax

Each of your shares is £43862 from which the first £12300 is exempt (your annual exemption allowance ) leaves £31562

As things stand (without your share of rental income ) you earn £32000 so

18000 at 18% = £3240

£13562 at 28% = £3797 - your tax owed will be £7037

Your wife you said have no income so for her all her share of the gain will be at 18% so £31562 x 18%= 5681

Note also her share of the rental income has not been taken into account so will affect the charged at which the gain is charged at