IHT and CGT on foreign disposal
My client is going to sell a foreign asset, which was gifted to him and his brother by their mother. Then mother passed away on 28 Dec 2008.
His share of the disposal proceeds will be £294117. Their mother is neither resident nor an ordinary resident in the UK. She was domiciled in Sri Lanka. The client migrated to UK in 30 years ago. He is under PAYE and dont have any other income. Advise and help is much appreciated. Thanks Sumith
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Tue, 09/03/2010 - 17:08 |
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Leaving office now. Will reply tomorrow.
Presumably your client is UK resident and has acquired a UK domi
Being here for 30 years it would be difficult to argue that he was non dom.
The mother's tax status is not relevant.
As such the sale will be subject to CGT in the normal way. The difficulty will be establishing the base cost. He is deemed for CGT purposes to have paid the market value at the date of the gift. If the asset is in Sri Lanka then the capital taxes office (or whatever it's called this week) of HMRC will have loads of fun disagreeing with you.
If you want any more help then you can send me a private message through accountingweb.