Bringing Assets into the UK Print
Assets owned by an individual prior to him becoming resident in the UK are treated as acquired out of capital, so there is no tax charge if they are brought into the UK either at the time the individual becomes resident here, or subsequently.
A tax charge arises on the cost of an asset if it is brought into the UK by a UK resident individual where the asset has been acquired since the individual became resident in the UK using either offshore income or gains. There is an exemption from the remittance charge in respect of any asset already owned by the individual on 11 March 2008 for so long as the individual continues to own that asset. It does not matter whether the asset was situated in, or outside the UK on that date. Furthermore, the asset may be taken outside the UK and subsequently brought back into the UK without triggering a tax charge. However, if the asset is sold in the UK, a tax charge may arise on the original cost. In addition, there could be a liability to CGT on any gain made on the disposal.
The above exemption also applies to assets acquired after 11 March 2008 provided the asset had been brought to the UK by 5 April 2008.
Personal effects such as clothes, shoes, jewellery and watches, are exempt from this charge as are any assets costing less than £1,000. The limit of £1,000 applies to each asset, or set, so this relief should not be overlooked.
Assets brought into the UK for restoration or repair, and assets in the UK for a total period of less than 276 days bought out of foreign income or gains will not be subject to the remittance charge. This is of particular relevance to artwork, but it should be noted that the 276 day period is cumulative, and not in respect of a particular tax year, or other period.
Artwork acquired after 11 March 2008 which is brought into the UK for public display at a museum or art gallery is permitted to remain in the UK for up to 2 years, or such longer period as HMRC may allow.
Gains otherwise taxable in the UK are relieved from CGT if the asset is sold in the UK and the proceeds are taken out of the UK within 45 days of receipt. Where the sale proceeds are payable by instalment, each instalment must be taken out of the UK within 45 days of receipt, but the last instalment must be taken out of the UK by 5 January following the end of the year in which the sale takes place, even if this is within 45 days of its receipt. There is no corresponding relief which allows the purchase of an item at auction in the UK and the subsequent transfer of that item out of the UK. In these circumstances the funds used to purchase the asset will be treated as a remittance if the purchaser is UK resident and uses offshore money to fund the purchase.