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Where Taxpayers and Advisers Meet

Property Tax

Posts: 2
Joined: Sun Oct 26, 2014 8:30 pm

Property Tax

Postby mad_hatter » Sun Oct 26, 2014 8:58 pm

dear members

I been working in Thailand for the last 4 years and now i am back in UK. On my arrival back to UK I get a letter from HMRC in relation to properties I bought & sold back in 2009. I had used an accountant to sort this out but he went bankrupt and ceased trading and I was unable to get my documents back(original papers) and then I left the UK for a teaching job in Thailand.

in 2009 I bought 4 properties and sold in the same year.
Property 1: bought for £130,000.000 sold for £170,000.00
Property 2: bought for £120,000.000 sold for £180,000.00
property 3: bought for £190,000.000 sold for £235,000.00
property 4: bought for £140,000.000 sold for £180,000.00
through the help of an local estate agent I was able buy these properties at low price due to the poor conditions. With help of the estate agent we ensure that the following conditions were met:
1) Properties were vacant at exchange
2) I was give access after exchange of contracts (Key Undertaking)
3) Carry out necessary work to improve the property
4) The estate agent would find buyers for the property with the condition that work will be done by completion statement
5) I was able to confirm through Solicitor Regulatory Society (SRA) that this is legal)
6) They are called back to back (most lenders stopped these after 2010
7) I would arrange a bridging loan in the unlikely chance that I cannot find a buyer on completion date.
9) I would then arrange a double completion....Seller A to Buyer A (Me) to seller B
Solicitor told to make it legal I would have to register is on my name first then then second buyers would register on his name.

I have all the photocopies of the documents e.g. bills for the work, key undertaking, I paid the stamp duty on my purchase, I register the property on my purchase.

Now I want to know will I pay Income Tax or Capital Gain Tax and also will I pay interest and will I pay a penalty.

I been given an deadline of 10th November to respond.

please advise

Posts: 6538
Joined: Wed Aug 06, 2008 3:22 pm

Re: Property Tax

Postby King_Maker » Mon Oct 27, 2014 8:20 am

Those transactions look like property development/trading, rather than property investment.

If so, the profit will be liable to Income Tax (plus NI) not CGT. However, any allowable expenditure is deductible - e.g. refurbishment, loan interest, SDLT, solicitors' fees etc.

Whether any tax is payable in the UK and/or Thailand is likely to depend on your Residence status (for tax purposes) and Double Tax Treaty.

Did your previous accountant advise on the matter?

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