How to move money out of Hong Kong

DannyStobo

My Sister's Husband (or should I say my Brother in law), recently had some hong kong land passed down to him from his uncle, he sold the land and managed to get $820,000 Hong Kong dollars for it, in £ Sterling that's about £80,000.

He has the money in a Hong Kong bank account which he set up, the big question he now has is what is the cheapest way in which he can get the money into his UK bank account, are there any fees of duties he is supposed to pay.

Appreciate any advice I can pass on to him.

eskbanker

https://www.moneysavingexpert.com/banking/foreign-currency-exchange lists a number of companies that will transfer funds from one currency to another, typically significantly cheaper than using bank-offered facilities, but that only covers the transactional aspect of the question, the tax/duty liability one will need someone far better informed than me on the local rules and regulations in HK!

DannyStobo

He was contemplating using Transferwise but as you mention, he doesn't really know where he stands in terms of tax duty liability.

badger09

DannyStobo wrote: »

He was contemplating using Transferwise but as you mention, he doesn't really know where he stands in terms of tax duty liability.

The following might be a good place for your brother in law to start his research

http://www.investhk.gov.hk/why-hong-kong/low-and-simple-tax-regime.html

http://taxsummaries.pwc.com/ID/Hong-Kong-Individual-Taxes-on-personal-income

DannyStobo

According to my bother in law, the tax side in Hong Kong has been taken care of by the land buyer and the $820,000 is safely in his Hong Kong account, the only issue he is not aware of is what will happen if he tries to move the money to the UK, he is a UK citizen and was born in the UK.

Voyager2002

DannyStobo wrote: »

According to my bother in law, the tax side in Hong Kong has been taken care of by the land buyer and the $820,000 is safely in his Hong Kong account, the only issue he is not aware of is what will happen if he tries to move the money to the UK, he is a UK citizen and was born in the UK.

Presumably he is tax-resident in the UK and so is likely to be liable for CGT on the proceeds.

bowlhead99

DannyStobo wrote: »

the $820,000 is safely in his Hong Kong account, the only issue he is not aware of is what will happen if he tries to move the money to the UK

Taking this part of the question literally. If he tries to move his money to the UK, using a reputable currency broker... it will leave HK and arrive in the UK.

There is not some secret magic forcefield which causes money sent to a UK bank from a mainstream HK bank, to get blocked from arriving.

When he speaks to the FX broker who gives him a rate, the broker will tell him where to send it (out of his HK bank's HKD bank account into the broker's client account) and after selling the HKD to buy GBP, the broker will send the proceeds to his UK bank's GBP account.

Alternatively he can just ask his HK bank to buy HKD850,000 worth of GBP at their own rate of the day and send the resulting cash to his UK GBP account. However, banks offering current accounts to normal retail customers do not specialise in getting the best rates on currency deals and he might save more than a percent by using a broker; well worth paying a few dollars of electronic transfer fees to move the money to and from the broker.

As a new customer of the broker, the broker is likely to ask him where the money has come from (sale documentation from the property transaction might be requested) in addition to wanting to properly 'identify' their new customer (e.g. he may need to give them passport/drivers licence, proof of address etc).

Voyager2002 wrote: »

Presumably he is tax-resident in the UK and so is likely to be liable for CGT on the proceeds.

Only if the land went up in value between him acquiring it from his uncle and him selling it. If he hasn't made a profit since he's had it, there is no income or gain for HMRC to tax.

If it did go up in value (e.g. by £20k) after he got it and before he sold it, then he has his £11,300 capital gains exemption to apply before the rest of the £20k (i.e £8.7k of it) is taxed at the relevant CGT rate.

But the OP didn't mention that he has made a profit on it. It was 'passed down to him' from a family member ; so if he received a gift or inheritance of some land worth £80k, and then he sells that land a bit later, for £80k, he has not made any profit on his ownership of the land and gains tax does not come into it. By contrast, if by 'passed down' the OP means he bought it off his uncle cheap for £1 and then sold it the next day for £80k then he has made a quick £79999 on his buying and selling and gains tax does come into it.

badger09

@ bowlhead99

Unless OP's brother in law already has 30000HKD in his HK bank account, it would be unwise to ask it to buy 850000HKD worth of GBP on his behalf;)

But if you know of an HK bank that will do it, I'll happily pass the details on to my son:p