Selling gifted foreign property - UK tax?

Crabi

Hi, I saw a number of posts on cash gifts from non-dom parents sent from overseas bank account. From what I understand, there’s simply no UK tax on that but it may generate tax where the sender resides.

My situation is slightly different though. My non-dom parents would like to transfer a flat they own in Asia to my name as a gift. I’m a foreign citizen and a UK tax resident. My question is: if I sell that flat without generating any rental income in the meantime and transfer the funds to the UK soon after, do I need to pay UK tax of any kind at all? And if I use this money to make a property purchase in the UK, what supporting documents do I/my parents/our bank(s) in Asia need to prepare?

Many thanks in advance!

AnotherJoe

Can your parents sell it and give you the money or wouldthat cause tax difficulties for them?

Crabi

Thank you for your reply. Yes in short this flat needs to be gifted it to me first (for complicated tax and non-tax reasons). That’s why I need to understand if this will generates a huge UK tax bill.

All comments are appreciated!

xylophone

https://www.gov.uk/tax-sell-property/selling-overseas-property

But the tax is on the capital gain from date of acquisition?

If you take ownership on 1st August 2019 say and sell six months later, the gain is unlikely to be huge and what gain there is may well fit within your CGT Allowance?

Would there be any kind of liability in the country where the property is situated?

Crabi

So essentially the quicker I sell it after receiving it, the less likely I will pay a big CGT?

How do I prove to HMRC the value of the flat when it’s gifted to me? Do I need to hire a surveyor to provide me with a report and translate that into English?

00ec25

Crabi wrote: »

So essentially the quicker I sell it after receiving it, the less likely I will pay a big CGT?

How do I prove to HMRC the value of the flat when it’s gifted to me? Do I need to hire a surveyor to provide me with a report and translate that into English?

yes you need evidence of the value when you acquired it. How you get that evidence is for you to decide:
- pay a professional valuer
- DIY based on identical property sold prices within a month or so of your purchase
- guess and let HMRC correct it to whatever they decide it should be and you take the tax hit.

Crabi

Thank you!

Am I right to say that if I arrange the date when the property is officially gifted to me shortly before the transaction date when I sell it on (or even do it on the same day), it will be strong evidence that the capital gain is minimal/zero?

Also am I right to assume that I will still need to report this sale to HMRC even the capital gain is zero? As I will need to bring that money to the UK to make my own purchase here?