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Posted Mon, 15 Nov 2021 11:14:03 GMT by Louis
I arrived in UK on 8 February 2021 and I am UK tax resident of 2021/2022. I completed the transaction of disposing the HK investment property on 12 November 2021. I would like to enquire the following questions: 1. Are all the dates of cash flow of buying and selling property counted on the date of exchange contract? 2. If I don’t transfer the proceed from disposal of HK property to UK immediately, will the amount of my tax burden in UK be different due to the change of the exchange rate of GBP? 3. I have the rental income from the HK property and all the income is already used to settle the mortgage payment of the same property in HK. The rental income from that property is subjected to HK property tax. Do I need to report the rental income to HMRC? Under the double tax agreement between HK and UK, should I need to pay UK tax? Thanks
Posted Mon, 15 Nov 2021 15:34:06 GMT by HMRC Admin 17

Hi,
 
If you are UK tax resident then you would need to report any gains to the UK.

Guidance on how to work these out can be found here :

Capital Gains Tax   .

If would only not report the income, when not brought to the UK, if you are claiming the remittance basis.

See link:

Residence, domicile and the remittance basis: RDR1    .

Again, if you are UK tax resident then you will need to report the HK property income.

However, you would also let us know about the tax already paid in HK as well so that you are not charged twice on the same income. 

Thank you.
 
Posted Tue, 16 Nov 2021 09:35:46 GMT by Louis
Hi there, Could I ask for more details about question 1. Expenses on buying property in Hong Kong involve different dates, for example, payment of deposit on 1 June, payment of solicitor fee on 1 August, payment of property agent commission and the final settlement of the property on 15 August. In this case, I should convert the expenses in Hong Kong Dollar to the Sterling amount when I calculate the CGT. I want to ask whether I should calculate the exchange rate on 1 June, 1 August and 15 August on different transaction dates or all the expenses should be counted on the date of exchange (i.e. 15 August) and use the spot exchange rate at that date to calculate the CGT? Thank you.
Posted Wed, 17 Nov 2021 12:24:58 GMT by HMRC Admin 28
Hi,

You can either use the exchange rate at the time of each transaction or you can use the average for the year.

Exchange rates from HMRC in CSV and XML format

Thank you.

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