Tax rule while transferring money from India to UK

Hi, I have a property in India that has been taken over by relatives and despite numerous trips since 2014 we are fighting legal cases to get it back. I took out a personal loan and sent money to India to cover the legal costs etc. If we do finally manage to get our property back can we bring the money back to the UK following the sale of the property and will we be taxed on the money including the loan money that we have not used? Also, does this not qualify under the dual taxation regime otherwise if you are taxed by both countries then there is very little left to bring over.

Hi Maruti9,

The guidance at CG15160 advises that sums  for establishing, preserving or defending title to or rights over the asset, is an allowable expenditure.

CG15160 - Expenditure: categories of allowable expenditure

Income and gains brought into the UK, would be taxable in the UK.

 If you sell the property, you will need to work out if there is a capital gain arising in the UK.  

If there is, it would be reported on a Self Assessment Tax return, where you would also be able to claim a foreign tax credit relief for foreign tax paid.

To work out if there is a gain, all aspects of the calculation  must be in pounds sterling.  

Currency would need to be converted using the official exchange rate in place at the time, you purchased/inhereited the property and when you dispose of the property.

Tax when you sell property

Thank you. 

I am a UK passport holder with NRE account in India. If I repatriate from NRE account to UK or if my parents send , amount equal to 100k. Which is gift from my parents for buying a house, will I be taxed here in UK.

Hi S0787571,
There are no income tax implications on the receipt of a cash gift unless the cash gift generates interest or dividends.
These would then potentially be subject to tax.  
Further guidance can be found here:
Tax on savings interest
Tax on dividends
Any income from a NRE account, is taxable in the UK.
Thank you. 

Hi .. I have transferred UK money to India and let's say 40k pound and gave it to my dad . Now can I bring 15k from the saving I have. 15k is lower than 40k should I still need to pay tax?

Hi Dimall,

Not on the actual capital that you transfer. You will need to declare any interest or dividend that this then generates.

Thank you.

Hi Team, I moved to the UK on skilled worker visa and started working full time from 21st November 2022. Before moving to the UK, I was working in India as a full time employee and my monthly salary got credited to a saving bank account maintained specifically for salary income. Now I would like to transfer these funds (maintained in saving bank account in India) to my UK bank account to meet my family’s living expenses in the UK and also for paying the deposit in future for buying a home here in the UK. Hence request you to advise my UK tax liability in this case. Also note that the amount which I intend to transfer is net of taxes as per Indian tax laws. Secondly I am planning to sell one of my property in India and intend to transfer that amount to my UK bank account as well. . So please advise whether I need to pay any UK tax if I transfer this sale proceed to my UK account though I will be paying all relevant taxes in India associated with this sale proceed. Thanks for your time and support. Regards, Gaurav

Hi,

For the transfer of the income please refer to:

Remittance basis 2023 (HS264)

As a UK resident, you will need to declare the sale of the property and you can claim relief for the tax paid in India.

Tax on foreign income

Thank you.

Thanks for the guidance and sharing relevant links but I am still not clear on my tax liability and shall be grateful if you could clarify. 1) The amount which I intend to transfer from India is my salary income which I earned during the financial year 2022-23 from Indian employer and I was not the UK tax resident during that period since I migrated on 10th Nov 2022 (147 days in FY 2022-23 in UK). So based on the aforesaid details, do I still need to pay tax if I transfer that income into UK now which was earned in FY 2022-23 when I was not UK tax resident? Thanks for your time and support. Regards 

Name Removed Admin

I am an Indian citizen , relocated to the UK on skilled worker visa and started working full time from October 2021. I receive an ex-gratia cum disability award in India which amounts to approx. 2000£ per year (and it is not classed as pension). The money remains in India and I do not transfer it to UK. And I do not pay tax in India for the amount earned as income tax is not applicable for that amount (lower than lowest income tax slab) Do I need to declare that as income in UK and pay tax on it in UK ?

Dear Team, If I put some amount into a Savings account and if that generates an interest amount more than my personal savings allowance - how should I pay the tax on the additional amount? Will my tax code change and the tax will be paid automatically by my employer before releasing my salary or do I need to pay tax on the interest I earn by myself? Thank you

Hi ndacdt,

If the payment is similar in nature to those listed below, then it is not taxable and does not need to be declared.

EIM76100 - Social security benefits: list of non-taxable social security benefits

If the payment is taxable in the UK, you could look at the remittance basis guidance under section 9.

Guidance note for residence, domicile and the remittance basis: RDR1

Thank you.

Hi,
If it is UK interest, the banks will notify HMRC and any addiotnal tax due will be collected in your tax code to be paid from your salary.
If it is foreign interest, you will need to complete a tax return to declare this and you have the option to pay direct or have it coded.
Thank you.

Hi Team, Sorry but I am not clear..may I clarify my doubt: The money I now have in my UK bank account is partly from my salary i receive every month working in the UK from my UK employer and partly the amount I got transferred from my Indian account after I relocated to the UK. The amount I got transferred from my Indian account is my savings after getting taxed in India from my salary i received while working in India. I do not get any foreign income into my UK bank account. This is my UK salary account Now if I put part of this amount from my UK salary account into a UK easy access savings bank account, i understand I need to pay tax on the interest I may earn. However my question is how can I pay this amount? Will the bank notify HMRC and any additional tax due will be collected automatically in my tax code to be paid from your salary? OR Do I have to declare and pay tax by myself? Thanks in Advance

Hi Team, I have gone through the Tax on Foreign Income section for UK resident, non domicile tax applicability. I have the following questions: I moved to the UK in June 2022 and need to bring 100k to UK to purchase property: 1. If I sell my India property for GBP130k, including GBP30k capital gain and pay GBP6k tax in India. Can I bring the GBP124k (130k minus 6k) to UK. I understand I will be required to pay tax on 30k in UK again and claim the foreign tax credit relief when I submit for assessment under remittance basis. please confirm 2. If I break my Bank deposits in India for GBP100k, paying interest GBP 5k annually, if I bring in GBP 105k to the UK, only the GBP5k interest income will be taxable in UK. please confirm. 3. if I take a loan of GBP 90k against property in India (70% LTV against the property of 130k) and I bring that money to the UK, then that money will not be subject to tax as that us not my income, but capital. Please confirm. Thanks.

Hi JithinJose2409

Please note that your bank or building society should provide you with  annual statements of taxable interest, which should be declared (if you meet the criteria for Self Assessment) in your Self Assessment tax returns.                                                    Have a look at Check if you need to send a Self Assessment tax return  and                                                     
Tax on savings interest

Thank you
 

Hi, I was a co-owner of a property in India which was recently sold. There was no profit made i.e no capital gains. And I have recieved zero tax deducted at source (tds) certificate from income tax department in India.Do I still need to declare this transaction and submit self assessment ?

Hi DM2023,
You can bring the £124K to the UK, but Capital Gains Tax will be payable. 
To declare the Capital Gains Tax on your tax return, you need to work out the calculation of the gain, using pounds sterling only.  
You will need to convert the purchase costs and expenses into pounds sterling, using the exchange rate in use at the time of purchase.
You will also need to convert the disposal value, costs and overseas tax paid, to pounds sterling, using the exchange rate at the time of disposal.  
You can then work out the gain.
The official exchange rates can be found here:
Exchange rates from HMRC in CSV and XML format
If you need to look back further, the arhived rates can be found here:
Exchange rates
Thank you. 

Hi ndacdt 

If the disposal value was over £49200.00 and you have to complete a tax return for any other reason, you will need to report it in your self assessment tax return, even if there is no gain or a loss arises.

Thank you

Hello, I am a Indian settled in UK. I have a property in India that I am disposing. I am paying Indian capital gains tax and it is in my Indian bank account. 1.Can I transfer the money across to UK without paying capital gains tax again in the UK? 2. a. Can I transfer the property to husband's name ( who is also a Indian settled in UK) and not pay CGT? b. If he sells the property will the CGT be calculated from the time of transfer to my Husband? Thanks