Marrying a foreigner who owns a property in their country

[Mike29]

I am British, my newly wedded wife is Chinese. My wife has a house in China purchased in her name many years before we married (but payed for by her family). If we sold the house:

1) Would we have to pay capital gains tax? if so:
2) Would the original value of the property be when it was purchased or when we married?

Thank you.

[Peter D]

How long has she owned it and how long has she lived in the property as your home. Regards Peter

[DCF]

I assume you live in the UK. How long has your wife lived in the UK? If she sells the house what does she intend to do with the money?

[bd6759]

Capital gains tax will be charged in China under Article 13 of the 2011 Double Taxation Agreement

https://www.gov.uk/government/uploads/s ... a-2011.pdf

[DCF]

The DTA with China states the gains may be taxed in China. Not will be taxed. This forum concerns UK taxes.

[bd6759]

China charges gains as income, and imposes income tax at 20%.
Whilst the DTA says that they "may" tax the gain, the domestic laws says that they will.
The tax paid in China will be offset against UK tax.
If it was where she lived in China prior to marriage, the gain will be exempt from UK tax.

This forum concerns UK taxes

Foreign tax paid is an integral part of UK taxation