Selling my overseas shares to buy a house

moodstarr

Hi everyone,

I'm new here (first post), but I'm hoping someone has the knowledge to at least point me in the right direction. I'm clueless!

OK here is the situation:

I just found out that a couple of months ago, my generous old man bought some shares, in the country of Jordan, under my name. I want to cash them out and use the money as a deposit to buy my first house.
I checked the stock price and current exchange rate, and it comes to around £100k at the moment.

Here are my questions:

1. How much would be taken off that £100k if I transfer it to the UK?
2. Does it make a difference that I'm using it as a deposit for my primary residence?
3. Would it make a difference if I transferred it directly to the person selling the house instead of via my own UK account? (I'm clueless about buying houses too, not sure who the deposit would be paid to actually)
4. My trustworthy sister is Australian, residing outside of the UK (she used to live here for years though) - could that be used to somehow reduce/eliminate taxation of the £100k? I remember hearing once that foreigners don't pay taxes on money they bring in. i.e. could I give her the shares, which she could then cash out, and use to buy 50% of a house here with me? (I would pay the rest with a mortgage). Sounds dodgy and maybe illegal, but then so do most tax cutting loopholes!

I don't know much about taxes and overseas shares and what not... the old man bought and put them under my name without telling or asking me! I found out and was able to verify it. I also don't know if using it to buy my first house makes a difference or not.
Obviously I don't want to do anything illegal - would just like to know what the score is i.e. how much money can I have for a deposit to buy a house in the UK.

I hope someone can give me some much needed guidance on the law and my options.
Thanks for reading.

moodstarr

dzug1

1 nothing other than exchange rate commission/charges
2 no
3 no
4 no point. If nothing else it doubles exchange costs.

There may be capital gains tax to pay if the shares have risen significantly in value since you were given them.

And there's a potential for inheritance tax should your father not survive 7 years. This would not directly be your responsibility

Edit - there's always the possibility that there will be tax in Jordan - no idea on this.

moodstarr

Thanks for your reply dzug1, that's really helpful.

So a question about paying CGT (the share price has actually fallen, but the exchange rate is working in my favour so it's worth more in GBP than it used to):

Say I sell the shares then transfer the money from the broker account to my UK account. What then? Do I need to inform the tax man? Or does the bank notify them? Essentially, who will decide whether I am to pay CGT? And how will they find out, and where do they get the information to base it on?

Regarding your adendum:

Since the value of the shares has fallen, cashing out will result in a loss in their local currency - so I believe that most likely, no tax will need to be paid over there.

Thanks again for your advice,
moodstarr

dzug1

You are responsible for telling the tax man if you owe CGT. If you do a tax return there is a section for this, if not, then you tell him.

On sums of this size there will be money laundering procedures to go through - I would guess that your bank will handle this and may or may not tell you they have done so. At least potentially, the taxman will get to know.