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 

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