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Where Taxpayers and Advisers Meet

CGT on sale of shares for non-residents.

msrx3sjj
Posts:9
Joined:Wed Aug 06, 2008 3:32 pm

Postby msrx3sjj » Thu Dec 08, 2005 5:33 am

Hi! I am a non resident (and plan to be for 2 full tax years) who plans to sell a significant shareholding in UK listed company. I will generate approx £15k gain.

Am I required to pay the full tax on this amount or am I entitled to the 8k annual exemption that normal residents receive and am I able to use brought forward losses from prior years of £4k to help offset this gain. Finally am I entitled to Taper Relief as I bought these shares in 2001.

Many thanks in advance for any help you can provide.

S

hashman
Posts:1277
Joined:Wed Aug 06, 2008 3:31 pm

Postby hashman » Thu Dec 08, 2005 6:19 am

Looks like you are a 'temporary non resident' who is looking to sell shares you acquired while you were UK resident. In these circumstances you will be liable to UK CGT on any gains realised while you are non resident for the tax year of your return. Taper relief at non-business assets rate will be available to date of sale. Annual exemption does not depend on residency but on chargeability so will be available for year of return. Losses b/f will reduce gains before taper relief is applied.

msrx3sjj
Posts:9
Joined:Wed Aug 06, 2008 3:32 pm

Postby msrx3sjj » Thu Dec 08, 2005 6:20 am

thanks a ton

tax me less!
Posts:983
Joined:Wed Aug 06, 2008 3:29 pm

Postby tax me less! » Thu Dec 08, 2005 6:25 am

In addition to hashmans comments which I commend, you need to be aware that the place you currently live may charge tax on the gain. If you are required to pay tax to that country then there may be issues of double taxation to address, and relief under double tax treaties. It would be helpful to know therefore where you are currently resident.

msrx3sjj
Posts:9
Joined:Wed Aug 06, 2008 3:32 pm

Postby msrx3sjj » Thu Dec 08, 2005 6:27 am

thanks tax me less. I currently live in Hong Kong? Any ideas about double taxation here. Thanks

hashman
Posts:1277
Joined:Wed Aug 06, 2008 3:31 pm

Postby hashman » Thu Dec 08, 2005 7:17 am

Great place! I worked there in the 70's when there was no tax on capital gains or on non-Hong Kong source income. Don't know current rules though.

Are you married I forgot to ask earlier?

JasonButcher
Posts:39
Joined:Wed Aug 06, 2008 3:24 pm

Postby JasonButcher » Thu Dec 08, 2005 8:22 am

Do you have to sell the shares whilst being non-resident.
The reason being the taper relief is frozen when you sell.
If you sell them in your year of return you will have an additional 2 years worth of taper.

msrx3sjj
Posts:9
Joined:Wed Aug 06, 2008 3:32 pm

Postby msrx3sjj » Thu Dec 08, 2005 3:22 pm

yes, I have to sell them as I need the cash.

Could I ask - does that mean that any gains through shares I may sell over the next 2 or 3 years while I am non-resident will be all chargeable in 1 year (i.e. the year I return). So effectively I can only use 1 years exempption to offset 3 years of gains??

Also, I have some gains in the current fiscal year when I was resident (I only left UK in September) - are these chargeable in my 2005-2006 tax return?

Many Thanks

JasonButcher
Posts:39
Joined:Wed Aug 06, 2008 3:24 pm

Postby JasonButcher » Fri Dec 09, 2005 1:02 am

only one exemption.
05/06 gains are chargable in 05/06 - even if disposed of after September.

msrx3sjj
Posts:9
Joined:Wed Aug 06, 2008 3:32 pm

Postby msrx3sjj » Fri Dec 09, 2005 4:42 am

Thanks Jason

Sorry to keep on. So in summary, please correct me if I am wrong - Any gains I make until April 06 will be treated in my 05/06 return even though I was non resident half way through the year and some of the gains were made in the non-resident period.

Any gains in 06/07 and 07/08 will be treated in my 08/09 return if I return in say June 2008 with just one annual exemption applicable?

Thanks in advance


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