Uxbridge219

Hi all,

Hopefully some one can give us some tax advice about bringing proceeds into UK from selling overseas property.

Background info :-
My wife (naturalised as British Citizen in 80's) and I are planning to move to the UK in Q3 2018. [I will be on spouse visa]

She left UK in 2003 and has been living and working in Hong Kong ever since, so she didnt pay any UK income tax nor NI contributions from that year.

We bought a one bedroom flat in West London Q4 2015 and are receiving rental income. Both of us have been registered under the Non-resident rental Scheme.

We just filled out our Self-Assessment Tax return for tax year Apr 15-Mar 16 (yes! we are late ..... bugger!) for our rental income.

Questions :-
We are planning to sell our flat in Hong Kong and transfer the proceeds to our UK bank account in order to buy a property for ourselves.

She is worried that the proceeds once deposited into our UK bank account will be subject to "tax on emittances". If thats the case, she is highly reluctant to send all the proceeds back, may be just 50% which is sufficient to pay for part of the property price then remaining on mortgage.

And I read from various posts that there is this "non-dom" criteria etc etc. could take into account.

So, my querstion is Should we transfer the proceeds before we move back as she is still classified as non-resident at that time? or transfer the proceeds after we settle down in the UK?

dont forget that we are being accepted as Non-Resident landord scheme due to our investment property in west london.

Thanks in advance for any advice. :0)

scot47

No tax on remittances to the UK.

AmanSood

Just to expand on Scot47's answer, the remittance basis of taxation only matters where you are considered UK tax resident. On the basis that you and your spouse have been living outside of the UK for a number of years you will be considered non-UK tax resident. Therefore, provided you sell your property before you come back to the UK and become UK tax resident, then you can remit the sale proceeds without giving rise to a UK tax charge.

nun

Yep, I agree with the other two posters. If you sell the HK property while still non-resident in the UK there will just be HK tax to worry about. You can then move the money to the UK without any taxation worries.

Uxbridge219

thanks to scot47, AmanSood and nun.

in case, poo hits the fan and we cannot sell the HK property before relocation.
Say, transaction completed and all proceeds receive 1 or 2 months after we settle down in the UK, then transfer to our UK bank account.

Will the remittance be subject to tax by then?


cheers

AmanSood

Hi Uxbridge219, if you sell your HK Property after you become UK tax resident then broadly as a UK tax resident you would be subject to UK income tax/capital gains tax etc on your worldwide income including capital gains tax on the disposal of your HK property on an arising basis (even if you don't bring the funds into the UK). There are some exceptions to this depending on your domicile and you may be able to limit the UK capital gains tax payable (under UK tax rules).

The position gets a lot more complicated and likely to be more costly for you if you sell the property when back in the UK. I would therefore recommend delaying your return to the UK until the property is sold.

From a HK perspective, as there's no Capital Gains Tax to pay on disposal of the property, you are much better off selling whilst non-UK tax resident.

Uxbridge219

thanks AmanSood.