[tomb25]

Hi, I am a permanent resident in South Africa and I am trying to find information on the Capital Gains Tax situation when selling a property in the UK. I recently inherited a small flat in Kent and am in the process of selling it. I will not pay CGT in the UK as I am now considered to be a non-resident having been away for many years, however that exemption is due to change next year. I heard somewhere that I will have to pay CGT on the sale to SARS but I believe that there is a threshold amount which might exempt me. I have tried in vain to find relevant info on Google and my query to SARS was recorded and a response should have arrived 'within 21 days' with no luck!
Is there anyone in the Forum who may have had a similar situation or possess some knowledge and may be able to shed a bit of light on the subject for me?
Thanks
Tom

 

[Jem62]

I've sold a property in the UK in preparation for our move back to CT. Since it was our main home in which we lived no CGT was payable, however, I decided to leave the money in a UK bank account i.e. current account until I decided how and where to invest it in the UK. Do not repatriate the money back to SA, you can transfer money via internet banking into your own bank account. I can for instance with my Natwest account transfer up to £75000 for £10, this is because I am transferring money into my SA account, it greatly minimizes the costs. You can also withdraw money at SA cash machines with a UK bankcard. This way I've stayed out of SARS grasping claws.

 

[tomb25]

Thank you for your reply Jem it was most helpful. I am just a bit concerned with the CGT as when I opened my SARS e-filing the pre-populated section had a tick in the box asking if i had any foreign assets and as I was a non resident landlord for the property for a short while I suspect that SARS has a record of this as the two countries have some form of agreement in this regard as I wasn't required to pay UK tax on the rental. However I recall seeing something to the effect that CGT would only be payable if the Gains were more than R3,5m but I can't find that reference anymore.
I just don't want SARS knocking on the door somewhere down the line looking for their 'cut'.
I will however have to bring some of the money over to buy a property in SA as I am retired here on an SA pension. I contacted a UK site called HIFX which was advertised on this forum and they don't charge for transfers of 3000GBP and over and their rates seem good compared to the banks and you can negotiate with them for the most preferential rate. They seemed to have a lot of positive reviews on Trust Pilot. Anyway, thanks again and I hope that you continue to enjoy your stay in SA.
Regards
Tom

 

[Jennybadenhorst]

Exchange4free have no transfer costs, I only ever transfer smaller amounts though so worth a look at their guidelines for larger amounts. Takes about three working days for the transfer to happen

 

[tomb25]

Thanks Jenny I'll check them out, the best I found and used was TransferWise, they had a small charge but they gave you the spot rate at the time of transfer which is the rate you see quoted online and not a discounted one. Unfortunately they all of a sudden couldn't operate with the ZAR or the Chinese Yuan for some reason and they are not able to tell me when that service will resume.
Cheers
Tom Byrne

 

[shumifan49]

AFAIK: In the UK CGT is not payable when selling the family home, but is due if it is not the family home.
The tax arrangements between RSA and the UK ensure you only pay tax on a transaction in one country, not both and it would normally be the country in which the transaction happens - in your case this would be the UK. The rental income, in your case should be taxed in the UK, however, if it is less than about £10000 per annum, then it makes it tax free as it is within the allowance(if it is the total UK income). It should then not be taxable in RSA. If you are above the allowance and have not been paying tax in the UK I would be more concerned that the UK taxman might come after you.
I would leave as much as possible in the UK to invest (I would not just leave it in the bank at current interest rates as it will quickly depreciate).
I would have contacted the UK home office/inland revenue first.

 

[tomb25]

Thanks Shumifan, after a bit more digging I think I have it sorted now, I was exempt from UK tax for the rental as it was under the threshold and I have been a non-resident for many years and have unfortunately not been earning GBP's since the '70's but I will have to declare it to SARS as part of my 'worldwide income'. I am also exempt from UK CGT at the moment for the same non-resident status, although from next year all property will attract 28% CGT for residents and non-residents alike. As for SARS and CGT I have asked for a valuation of the property for April 2013 which was when the property was transferred to my name. That will provide my base and the profit made after that figure will be taxed at 33.3% by SARS after a R30,000 allowance has been factored in. I was thinking about just staying quiet about everything but dread that knock on the door somewhere down the line.
I thank you once again for your time and advice it is much appreciated.
Cheers
Tom Byrne