Help with Tax concerns - transferring money from India to UK
Dec 11th 2012, 6:59 pm
#1
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Joined: Dec 2012
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Help with Tax concerns - transferring money from India to UK
Hello all,
I been trying to get a solid answer or at least some direction where to find accurate literature about this issue..
In summary I'm an NRI (born in India and thereafter a British citizen), I'm planing to sell my agricultural land in India with a view to bring the money to the UK. The sum would be in excess of 1 crore rupees.
I hold HSBC UK and India Premier Banking facilities so am able to do transfers between the countries, am just concerned about losing my hard earned capital through a taxation procedure which may make me change my mind about selling.
I guess the questions I would like answers to are:
Is the sale of agricultural land in India subject to any tax i.e. the equivalent to how the UK has capital gains tax?
Would the money be liable to tax if I transferred it to the UK from India as proceeds of sale of the land?
If so, how much percentage would it be liable to?
Is it India or the UK where the tax is to be paid?
Please shed some light on this confusing area for me or point me in the right direction.
Many Thanks
RT
I been trying to get a solid answer or at least some direction where to find accurate literature about this issue..
In summary I'm an NRI (born in India and thereafter a British citizen), I'm planing to sell my agricultural land in India with a view to bring the money to the UK. The sum would be in excess of 1 crore rupees.
I hold HSBC UK and India Premier Banking facilities so am able to do transfers between the countries, am just concerned about losing my hard earned capital through a taxation procedure which may make me change my mind about selling.
I guess the questions I would like answers to are:
Is the sale of agricultural land in India subject to any tax i.e. the equivalent to how the UK has capital gains tax?
Would the money be liable to tax if I transferred it to the UK from India as proceeds of sale of the land?
If so, how much percentage would it be liable to?
Is it India or the UK where the tax is to be paid?
Please shed some light on this confusing area for me or point me in the right direction.
Many Thanks
RT
Dec 12th 2012, 5:28 pm
#2
BE Forum Addict
Joined: May 2007
Posts: 2,941
Re: Help with Tax concerns - transferring money from India to UK
Well the right direction is a good Chartered Accountant in India.
I think you will find:
# the sale may not be as easy as all that
# you can sell agricultural land as an NRI but you can't buy it back!
# you will need a PAN card
# all sales >50 lakh should be reported to IT by the Registrar
# there will be Stamp Duty and Registration fees to pay by purchaser which may influence the price
# if you want to repatriate the money there can be no black/white arrangement - you will need a CA's certificate of tax paid for the full amount you wish to repatriate
# sale of immovable property (held for > 1 year) will attract long-term Capital Gains tax at your highest marginal Income Tax rate in India (with no other income arising in India you will have income in excess of circa 1 Crore which will attract the highest tax rate).
# There is a dual taxation agreement with UK so you should avoid UK CGT
## Get a good Chartered Accountant in India.
hth AndyD 8-)₹
I think you will find:
# the sale may not be as easy as all that
# you can sell agricultural land as an NRI but you can't buy it back!
# you will need a PAN card
# all sales >50 lakh should be reported to IT by the Registrar
# there will be Stamp Duty and Registration fees to pay by purchaser which may influence the price
# if you want to repatriate the money there can be no black/white arrangement - you will need a CA's certificate of tax paid for the full amount you wish to repatriate
# sale of immovable property (held for > 1 year) will attract long-term Capital Gains tax at your highest marginal Income Tax rate in India (with no other income arising in India you will have income in excess of circa 1 Crore which will attract the highest tax rate).
# There is a dual taxation agreement with UK so you should avoid UK CGT
## Get a good Chartered Accountant in India.
hth AndyD 8-)₹
Dec 12th 2012, 8:06 pm
#3
Lost in BE Cyberspace
Joined: Apr 2010
Posts: 20,711
Re: Help with Tax concerns - transferring money from India to UK
Would agree with Andy see a good Indian accountant.
Just a few more points the Indian CGT is less than UK CGT, (It will be on gov. estimated profit not whole price) so you would have to pay any difference in UK.
You can avoid the CGT in India by buying Government Bonds and keeping them for a number of years I think three (and also get nominal Interest).
Make sure your buyer has enough money to pay all white.
Finally again, as above see an accountant.
(PS) If your buyer buys to build there, the onus will be on yourself to get the change to non-agricultural which can take time, unless the buyer is very keen and helps out with money/'extra'
Just a few more points the Indian CGT is less than UK CGT, (It will be on gov. estimated profit not whole price) so you would have to pay any difference in UK.
You can avoid the CGT in India by buying Government Bonds and keeping them for a number of years I think three (and also get nominal Interest).
Make sure your buyer has enough money to pay all white.
Finally again, as above see an accountant.
(PS) If your buyer buys to build there, the onus will be on yourself to get the change to non-agricultural which can take time, unless the buyer is very keen and helps out with money/'extra'
