duty to report to HMRC

duty to report to HMRC

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I have a question regarding a sale of an overseas property by UK resident and whether there is a duty to report a sale to HMRC.

If there would be no tax payable on the sale abroad, and in any event there would be a loss or nil gain from the sale at most, what is a position with regards to HMRC? Is there a duty to report a loss if one is not registered for self assessment and does not want to claim any losses?

Looking at the HMRC website, I could find the following information 'sometimes you need to report to HMRC even if your gains are below the tax free allowance'. Send a tax return if you dispose of  the assets worth 44,400 of ir you have losses which you wish to claim for. 

However, what if there is no gain or there is a loss? Does no gain or a loss have the same meaning as gains below the tax free allowance?

Thank you.

Replies (5)

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By cohen
04th Feb 2016 18:56

Hi

Yes, if proceeds are above 4 x annual exemption, I would report the gain/loss.

If there's a loss, then presumably you would prefer to have this available to offset against future gains.

If you want to avoid doing an SA return, then you could try writing with details of the gain/loss, and asking HMRC to confirm if a return is necessary.

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By Matrix
04th Feb 2016 19:14

Firstly check the tax treaty since the territory in which the property is located may have the taxing rights.

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paddle steamer
By DJKL
04th Feb 2016 20:16

Also take care with the different exchange rates to be applied to the purchase price (at that date) and the selling price (at that date)

You need to convert each (and costs) at the relevant dates re UK reporting, so if there has been movement in the rate you can end up with a gain in sterling but none in the overseas currency. (or vice versa of course)

I bought a house in Sweden for 599,000 at an SEK rate of 12.9 to the pound so £46,434. If I sold it today for 599,000 SEK the rate would be circa 12.26,to the pound, so £48,858, so whilst no gain in SEK in sterling a gain of £2,424.

( I hope it is now worth much  more than 599,000 SEK, but the point is when I do sell the exchange rate movement could work for or against me, this is easily missed by people going, "I paid $100,000 sold for $98,000, no issue" but of course a dollar loss may not be a sterling loss)

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Replying to johnhemming:
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By Agus
04th Feb 2016 20:28

Hi DJKL, 

Hi DJKL, 

I have been taking the exchange rate into consideration and waiting nervuosly for the pound not to go down;-)

 

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By Agus
04th Feb 2016 20:24

thank you Cohen and Matrix for your advice. 

 

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