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[fish fingers]

Trying to understand the UK tax system for overseas earnings and sold assets etc. When paying capital gains tax, normally you wd be taxed 18% (or 28% if the gain or profit is above £35,000) - but you wd have a tax free allowance on the first £11,000. i.e. if you made a 15k gain or profit you wd pay 18% on 4k

Except I'm not sure the UK (capital gains) tax free allowance applies on foreign earnings? can anyone shed light on this?

Edited January 8, 2014 by fish fingers

[SheungWan]

Allowances should be factored in. You can also offset taxes paid abroad if there are reciprocal arrangements between the two countries. This all assumes that you are UK resident for tax purposes. PS pay an accountant to do the books. It pays for itself in my experience.

[Ludacris]

I could be wrong, but the way I understand it is as long as you're not American, and are truly a tax resident of Thailand and a non-resident of your home country, then you only need to consider Thai tax law for assets inside Thailand.

Since Thailand has no capital gains tax, you wouldn't owe anything.

Thaivisa can be a good staring point, but best to consult a good tax lawyer before making any transactions.

[77Dan]

Are you a UK resident? If not you don't pay capital gains on overseas assets. If you are a UK tax resident, well you might be liable if you choose to declare it to the UK taxman. I assume the allowance would still apply but better check. When you talk about earnings, do you mean earnings from selling something like a house or stocks and shares?

This is from http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm

Overseas assets are liable to Capital Gains Tax if you're 'resident' - in the UK. For example, if you choose to live or work in the UK and do so on a regular basis, you're probably resident here. You are liable on gains arising both in and outside the UK.

Typical overseas assets include:

• a holiday home abroad
• shares in a foreign company
• land overseas bought for development

However, if you're 'resident' in the UK but not 'domiciled' here, you may be able to claim what’s known as the 'remittance basis'. This might perhaps be because you or your father were born abroad, or you plan to live permanently abroad. You're liable on all gains arising in the UK. You'll only be liable on foreign gains when you bring them into (‘remit’ them to) the UK.

[SantiSuk]

Extract from a previous post

"Are you a UK resident? If not you don't pay capital gains on overseas assets".

Needs amplification. As always taking tax advice from a website is dodgy (ex UK Chartered Accountant speaking)

If you were previously a resident for UK tax purposes and become non-resident then you will remain liable for capital gains taxes on the disposal gains on UK chargeable assets until the end of the tax year in which you became non-resident.

Thereafter you will not liable to UK capital gains tax PERIOD. It does not only apply to "overseas assets" (sic). Even if you have gains on assets that you hold in the UK you will not be liable to UK capital gains tax. So, if you hold (for example) shares onshore-UK, or you own property in the UK you will not be liable to UK capital gains tax on any disposals that fall in this "thereafter" period.

Note however:

1. proposals are under consideration at the political level in the UK to charge tax to anyone, regardless of tax residence, on gains made on UK (domestic only?, not sure) property.
2. If you become tax resident again, having been non-tax resident for a period of less than five complete tax years then you will be charged capital gains tax retrospectively at the full rate (according to whether the level of your taxable income puts you into the 18% or 28% tax rate category) and you will have only the year of arrival's (ie one only) CGT annual exemption available to you to mitigate your tax liability. Very important if you are not certain about your medium term horizon - you may end up losing out if gains could have been structured to fall within an exemption that would have applied had you kept your UK tax residence

[A little bit beyond the remit of this thread, but I would encourage anyone who is UK non-resident but who has property in the UK to take tax advice or thoroughly research and consider whether to make contingency plans to sell the property before any such legislation is enacted. Maybe selling the property to crystallise a gain in an untaxed environment and buying another will make sense, but the numbers would have to be looked at on a case by case basis]

E&OE - you're not paying me, so not thoroughly checked (and I'm not a tax specialist type of accountant anyway!)

Edited January 9, 2014 by SantiSuk

[fish fingers]

excellent advice ! The UK tax system sucks…

I have to go back and forth so it may be that I have to pay tax - the big question is if the tax Allowance of £10,900 per annum applies to foreign earnings/ gains from sold assets in Thailand

Edited January 9, 2014 by fish fingers

[SheungWan]

excellent advice ! The UK tax system sucks…

I have to go back and forth so it may be that I have to pay tax - the big question is if the tax Allowance of £10,900 per annum applies to foreign earnings/ gains from sold assets in Thailand

Yes, you should do. Note... Your accountant will expect you to convert the baht into sterling. Try to book the sale in terms of the current exchange rate when you meet the accountant rather than the actual rate prevailing at the time if the asset was sold earlier in the year. Worth a punt.