Looking for some help to understand tax implications from a failed property transaction.
I Invested money to buy a property abroad but the property developer never delivered the property. After much deliberation, I was finally able to get my money back with some compensation for the opportunity loss from the developer. This has however thrown me into a tax dilemma and wondering if someone can help me. The compensation for lost opportunity was tax locally in the country of origin as per local tax law. Assuming I am UK domiciled and resident, what sort of tax will be applicable? - will this be classified CGT or Foreign income? The foreign country has a DTA with UK like most countries so I am hoping to get credit for foreign tax paid. Will foreign exchange rates calculation include capital as well as compensation when calculating overall gain. A weaker £ has put me in a rather unwanted situation. Any help is much appreciated. Thank you!
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