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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have just sold a house in Thailand and want to repatriate

Resolved Question:

I have just sold a house in Thailand and want to repatriate the funds.I am still a UK resident the house in Thailand was just a holiday home,I built it 6 years ago and sold it at a loss.

In the UK I do not want to send the cash straight to my UK bank account but to a family member who is wanting to buy a house and im, loaning them the money to do that.

The question is do any money laundering regulations come into force and would this cash be subject to any taxes etc.

Regards

Paul.
Submitted: 1 year ago.
Category: UK Tax
Expert:  Tony Tax replied 1 year ago.
Hi.

As far as UK tax is concerned, there would only be the possibility of Capital Gains Tax if you had sold the Thailand property at a profit. I don't know how you worked out the loss but I would point out that, unless you worked it out in UK pounds without converting to Thai Bahts, you would need to use the exchange rates prevailing at the time of the original build for the purchase and at the time of sale or the average rates for the year ended 31 March during which those events occurred. Gains on currency exchange are taxable.

As far as the transfer to your family member is concerned, you and the family member should each inform your respective banks before the transfer of what is about to happen in order to avoid delays in accessing the money due to money laundering checks. That is usually enough. It would be as well to ask the banks what their procedures are and whether you and your family member need to provide any documentation. You should write a letter to your relative confirming the loan and the amount. The relative will not have to pay tax on the loan.

I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.


Hi


 


I built the house 6 years ago when the baht to pound was 72 to £1 and it cost 14 million baht however the market here in Thailand tanked and I sold it for 8.5 million baht but at an exchange rate of 47 to the pound,I realise this is in my favour financially but to what degree I have not worked it out.


 


Therefore if there is a CGT when would it be collected and declared?,


 


Thanks

Expert:  Tony Tax replied 1 year ago.
Let me do some calculations and I'll get back to you in a bit.
Customer: replied 1 year ago.


May I also mention the cash from the house sale resides in a reputanle Thai bank account and I will be sending the money direct to my relative as a loan to purchase a house,would there be any issue with that.


 


Thanks

Expert:  Tony Tax replied 1 year ago.
Hi again.

Based on the figures you have me, you have made a capital loss of about £13,593. You built the property for £194,444 and sold it for £180,851. There may be legal fees etc that you can take account of as well.

If you complete annual tax returns, you should include the capital loss in the return for the UK tax year in which the property was sold so it can be used against gains you may make in the future. If you don't complete annual tax returns, you should inform the tax office of the capital loss by letter.

I'm not an expert on Thai banking procedures I'm afraid so you'd need to inform the Thai bank of what you want to do to find out if there will be any issues. I cannot think why there would be but it's worth asking.
Customer: replied 1 year ago.

Hi


 


There is no issue with the Thai bank letting me transfer the money to my relative I was wondering if there would be any issue with the receiving UK bank which would be my ex wives account.


 


 


And her having this money loaned to her would not incur any tax etc for her although this would not be her permanent residence we are buying this house for our eldest daughter to live in.


 


Thanks

Expert:  Tony Tax replied 1 year ago.
As long as you do what I suggested in my earelier answer, ie informing the respective banks in advance of any transfer and being able to prove the origin of the money, I see no problems.

No tax is payable in the UK on loans. If your ex-wife will own the property and she sells it at a profit in several years with it never being her main home, there may be a liability to CGT depening on the amount of the gain and the tax rules at the time.
Customer: replied 1 year ago.


Hi


 


If I where to become bankrupt would there be a claim on her house as I had loaned her the money.


 


Thanks

Expert:  Tony Tax replied 1 year ago.
I'm not an expert on bankruptcy law. However, if you were made bankrupt your trustee in bankruptcy would probably have the right to ask those you had lent money to to repay it. If you lend your ex-wife a sum of money, then she would be your debtor and your trustee in bankrupcy may go after her for repayment of the loan.

As I said I'm not an expert on bankruptcy so I'd advise you to seek appropriate advice on that.
Customer: replied 1 year ago.


Hi


 


Can you ask a bankruptcy lawyer/expert the answer to that last question I posed.


 


Thanks

Expert:  Tony Tax replied 1 year ago.
I cannot do that I'm afraid. The bankrupty question is a different topic and you would need to post it directly to the relevant section of just answer. I can only deal with tax questions here which I have done in your case.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14197
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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