erictheone

Any friendly UK tax gurus out there?

British expat, due to return to UK soon after 14 years in Singapore. Non-resident for UK tax purposes since 2002, and haven't owned a home in UK since 2003.

If I don't manage to sell my Singapore home until AFTER I return to UK, could I be hit with UK capital gains tax on any profit? I assume not, since it's my principle (only) private residence.

Or would HMRC tax me on any gain from the day I land in the UK until the day I sell?

Any how do they calculate the gain? I'll make probably zero profit in SG Dollar terms but, because the way the SGD/GBP exchange rate has moved over the years, I'll make a profit in GBP terms (difference between SGD sale price now converted into GBP at today's rate LESS SGD purchase price converted into GBP at the rate at time of purchase)?

No luck finding an answer to this on HMRC website or elsewhere.

uk_grenada

If you didnt repatriate the money, even if you did, i wonder how the tax man would know?

TopNik

Pistolpete2

Looking at this myself, I don't see any discrimination on the part of HMRC between UK and overseas properties in general so the basic rules are as per:

https://www.gov.uk/tax-sell-home

BUT, there is a new(ish) rule that states for overseas properties you must live in it for the qualifying period in a year for it to be CGT free:

https://www.gov.uk/tax-relief-selling-home

The mention of overseas properties there and nowhere else certainly suggests that otherwise the rules are the same for UK and overseas. So if you meet the basic rules you are in the clear.

If you become tax resident and sell UK property the (sterling) gain is from the date of purchase and not date of arrival so I see no reason why, in the same way, that would be any different for overseas property.

Typically HMRC seem to only want to respond if you have DONE something in which case they can explain your predicament. They tend not to respond ahead of time so that you can tax plan. I tried and tried to get advice ref CGT ahead of arriving in the UK and ultimately took professional advice as it never came in spite of being told it had been referred to an HMRC department that would respond.

FYI, I am registered for self-assessment with HMRC and use their message link to send requests for information and this does seem to work far better than cold-calling them - most of the time.

You have mentioned Singapore and I will confess that I came unstuck somewhere else on BE recently by giving CGT advice in general, particularly against a back-drop of no double taxation treaty being in place when in fact in that case there was one - for Canada, and Canada had its own rules for dealing with gains for residents who become non-resident by leaving.

erictheone

Thanks Pistolpete2 for a helpful reply.

You're absolutely right that HMRC don't seem to want to give any guidance on what they call "hypothetical" situations - as you say, that would help us to tax-plan ahead. Also agree that the rules for UK and overseas permanent homes (i.e. "principal private residence") should be the same - so no CGT. (And there's no CGT in Singapore anyway).

So then it's really just the timing point. Safest will be to ensure my Singapore home is sold, and money in the bank, before I set foot back in the UK. And I think I read that HMRC do give some sort of "grace period" for the sale to happen, after returning to the UK, for a returning expat (but no idea if that's on the statutes, and how long it would be). So I'm expecting only to be hit if, for example, I can't sell for six months after I return and then, even if there's still no capital gain in SGD terms since purchase, HMRC decide to do the calculations with GBP equivalents, so I end up showing a notional gain, which they'll decide to tax, at least pro-rata for the period between me landing in the UK and the sale date.

I truly hope that HMRC won't say that - at the extreme - You sold a day after returning to the UK, so we're going to calculate a CGT liability for the full period of ownership (8 years), in GBP terms, even though it was your Principal Private Residence (albeit in Singapore) for 99% of the time you owned it, whilst you were Non-Resident for UK tax purposes.

Fingers crossed!

Dizzyp

The rules on CGT if you were selling a UK property while as a non-resident is a very different kettle of fish and the rules have recently changed (before you were not liable for any CGT). However, this doesn't apply to your circumstances.

The UK doesn't tax individuals on worldwide income so they won't be interested in your Singapore house profits. However, once any money is deposited in the UK, then of course, you will pay tax on any investment made with it. However, I don't know if Singapore has CGT and if they do, then you pay it there. Only the US taxes worldwide income as far as I know and HRMS has never asked me about my US financial affairs in 15 years.

Pistolpete2

If you are tax resident in the UK you are taxable on your worldwide income and capital gains. The only taxes you can avoid are those if you are resident but not domiciled which would be limited to those funds from income which are actually remitted to the UK and non-uk assets for inheritance tax.

Note that the rules regarding being designated as non-domiciled changed in the just-gone emergency budget. Those born in the UK to parents who were themselves born in the UK who then leave and become (or claim to be) non-domiciled cannot return to the UK to settle and still claim to be non-domiciled, unless, I would hazard a guess, the move to the UK is only temporary in nature and you could show, for instance, that you still had a home overseas that you ultimately intended to return to - this change is not with immediate effect (I believe it is effective April 6th, 2016).

I believe what you are trying to say is that even if you are not US tax resident you still pay US tax, as a US Citizen, which is not the same thing at all. Almost everybody taxes tax residents on worldwide income, subject to double-taxation treaties.

Dizzyp

Perhaps I should have emphasised that HRMS is not interested in non-residents tax affairs in other countries. Since the poster is not yet UK resident, has been out of the UK more than 5 years, and his property is not in the UK = no CGT due to HRMS. Once he is UK resident, yes, the situation changes. If he doesn't sell the property before leaving Singapore and also buys another house in the UK, then it becomes more complex.

https://www.gov.uk/tax-foreign-income/residence
and https://www.gov.uk/tax-return-uk

I would suggest the poster seeks professional advice in Singapore!