Selling land abroad - proceeds to UK

[belowdeck]

Hi, I need some advice please. My father had some agricultural land that has been in our family for many many generations and in northern India. He inherited the land from my late grandfather in 2018. Due to way records are held its very complicated and the land my father owns is part of a larger piece of land owned buy about 6 families (extended family who are based either in UK or Canada). The good news is all families have agreed to sell the land jointly and the sale is going through with a buyer. The amount my father will receive is in region of £350k for his share.

My question is how do we transfer this in the safest and most tax efficient way from an Indian bank account to a UK bank account.

Concerns are the paper trail will not be very good (I only assume this due to the way current records are currently held). As we have never been through such a process, not even sure what documents to request to help our situation. Any advice appreciated

[alscar]

I assume there will be a Solicitor or Lawyer involved somewhere in the chain so presumably they will be the one to advise ?
I would guess it will be either using a money platform like Wise or indeed and maybe preferably a Bank to bank transfer using Swift etc.
I've only sent relatively large sums to Australia so that's where my knowledge ends.
I on behalf of my family own some land in Israel also inherited but trying to prove that to the Government there has proved impossible to facilitate such a sale as they are insistent on requesting a receipt !
Not easy when said land was acquired in the 1920's

[Countdown]

belowdeck said:

Hi, I need some advice please. My father had some agricultural land that has been in our family for many many generations and in northern India. He inherited the land from my late grandfather in 2018. Due to way records are held its very complicated and the land my father owns is part of a larger piece of land owned buy about 6 families (extended family who are based either in UK or Canada). The good news is all families have agreed to sell the land jointly and the sale is going through with a buyer. The amount my father will receive is in region of £350k for his share.

My question is how do we transfer this in the safest and most tax efficient way from an Indian bank account to a UK bank account.

Concerns are the paper trail will not be very good (I only assume this due to the way current records are currently held). As we have never been through such a process, not even sure what documents to request to help our situation. Any advice appreciated

We had a similar situation a few years ago.

I think the problem you might have is capital currency controls - will you be legally allowed to take that amount of money out of India?

[ikarl]

so about 3.5kg of gold.....

interesting

[Jon39]

belowdeck said:

My question is how do we transfer this in the safest and most tax efficient way from an Indian bank account to a UK bank account.

There is now a modern way of dealing with this, which appears to be a perfect solution for your requirement.

You don't need any previous experience in the trade, so that is not a problem.
Rent a cheap shop premises, fit a few basins and chairs, then erect a shop front sign stating 'Turkish Barber'.
There is no need to be a fluent Turkish speaker, it is just a euphemism.
Open accounts at several different banks in the business name, so that you can pay in cash 'takings'.

A friendly man (NF), probably holding a pint glass and smoking a cigarette, may chat to you one day asking, "Do you cut hair and is there a Lamborghini parked out the back?'

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ikarl said:

so about 3.5kg of gold.....

interesting

Would get stung for 20% VAT

[Huntsman]

I had 140k euros from a property sale in Spain.

I set up a transferwise account and did it in chunks of £5k at a time to reduce the risk.

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It's generally very easy to transfer money between countries - except where the sending country has capital controls.

In that situation you quite often have to resort to the black market.

[chip*]

Payment mechanism is pretty simple, but I wouldn't be surprised if HMRC will be sniffing around once the money hit the UK account.

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chip* said:

Payment mechanism is pretty simple, but I wouldn't be surprised if HMRC will be sniffing around once the money hit the UK account.

If it's a gift from family living abroad I don't think it's taxable

[bobbylondonuk]

belowdeck said:

Hi, I need some advice please. My father had some agricultural land that has been in our family for many many generations and in northern India. He inherited the land from my late grandfather in 2018. Due to way records are held its very complicated and the land my father owns is part of a larger piece of land owned buy about 6 families (extended family who are based either in UK or Canada). The good news is all families have agreed to sell the land jointly and the sale is going through with a buyer. The amount my father will receive is in region of £350k for his share.

My question is how do we transfer this in the safest and most tax efficient way from an Indian bank account to a UK bank account.

Concerns are the paper trail will not be very good (I only assume this due to the way current records are currently held). As we have never been through such a process, not even sure what documents to request to help our situation. Any advice appreciated

Your situation is a what a lot of people of Indian origin face. My experience is a decade old atleast and rules have changed since then, but I can give you an outline of how it works.

First, hire a decent accountant. You need to pay a tax deducted at source and then submit the reciept for the actual registration to take place. This tax has to be claimed back against your normal Income tax return as part of CGT calculations. That is the first step in a normal process. For resident tax payers, the rates are different to non residents. Next is the transfer part - there is again a capital control tax on the funds which is reclaimable against your normal resident tax returns. The whole process is designed to capture CGT upfront and also prevent capital flight of black money.

Now the efficiency part. Ask the accountant to acquire a Non Resident Tax account number. Submit a certification that no/minimal CGT is due against that Tax account based on inherited land valuation and current transaction price. Pay the actual calculation upfront rather than nominal 20-30% for claiming back later. This enables the actual registration and correct CGT payment upfront and you dont have to deal with claiming back etc a year or two down the line.

Next is the capital controls tax. Submit a certification through the accountant to the RBI stating your non resident status, inherited property details, upfront CGT payment and accountants certification. Once this is approved by RBI - your local bank has permission to transfer without capital controls tax deduction.


In summary - the normal process is designed to pay a % upfront and claim back against tax returns later, which is a long timeline. the above 2 steps allow you to pay the correct amount upfront and get it approved for repatriation to your jurisdiction of residence.


Hope it helps as it is a slightly old information, but the broad scope and methods are still relevant.