Foreign Asset Reporting Support

The problem this solves

Your accountant abroad asks for a figure for the Indian property. You do not have one, the deed is from 1979, and the property came through your father. The form will not accept an estimate and your accountant will not sign something unevidenced.

What each regime actually wants

• Canada, T1135. Runs on cost amount, not market value, and the threshold is one hundred thousand Canadian dollars of total cost at any point in the year. For inherited property the cost amount is generally the fair market value at the date of the previous owner's death.
• United States, FBAR and Form 8938. Directly held real estate is generally not reportable on either. The accounts your rent flows through can be. Your CPA decides, and we would rather say that than sell you a report you do not need.
• United States, Form 3520. A gift or inheritance from a non resident relative above the reporting threshold has to be declared, with a value stated.
• Australia. Residents are taxed on worldwide gains, so the cost base in Australian dollars, and the exchange rate applying on each relevant date, both matter.
• United Kingdom. Inheritance tax moved to a residence based test. Where a foreign asset comes into scope, HMRC expects professional valuations to be enclosed with photographs and the exchange rate used.

The mismatch to plan around

Your foreign cost base and your Indian cost base are usually different numbers. Canada and the United States commonly give a date of death value. India gives you the original owner's cost, or the 1 April 2001 value. Neither is wrong. You will simply compute two different gains, and treaty relief prevents you being taxed twice on the same income.

The practical consequence is that many families need two valuations, at two different dates. Commissioning them together is cheaper than discovering the second one a year later.

What we deliver

A valuation as at the date your accountant specifies, in rupees, with a conversion to your currency stating the rate, its source and the date. Retrospective dates are routine work for us.

Talk to your accountant first

Ask them which date they need and which figure, cost or market value. Send us that answer and the job is straightforward. Guessing at it is how people end up paying for the wrong report.

What you get

A signed report from a government approved valuer, based on a real inspection, with the workings shown so the person reading it can follow how the figure was reached. Our registration number is printed on it. If anyone questions it later, the evidence is already in the file.

• An inspection that actually happened. Our engineer stands at the property. Every photograph carries the date, the time and the exact position.
• Comparable evidence, named. Real sales from the relevant area and the relevant period, identified so anyone can check them.
• Method stated openly. Which approach we used and why, with the adjustments set out rather than buried.
• The right date. A valuation is always as at a date. Get the date wrong and the number is useless even if the work is perfect.
• Currency where you need it. Rupees for the Indian side, converted for your side, with the exchange rate and its source stated.

How long it takes

Normally 48 to 72 hours from the site visit, once we have the basic papers. If it is urgent, tell us and we will treat it that way. For anything tied to a sale, start before you sign the agreement rather than after, because some of the biggest savings are only available in advance.

What it costs

It depends on the property type, its size and how far our engineer has to travel. Message us with the basic details and you get a firm figure before any work starts. No surprises later, and five percent off your first report.

What if the papers are missing

Very common, and usually not a problem. A deed from 1974 may simply not exist in the family any more. Records at the sub registrar office, property tax records and the notified rates for the area can normally fill the gap. Tell us what you do have and we will tell you straight away whether it is workable.

Questions people ask

Does T1135 ask for market value?

No. It asks for cost amount. For inherited property that is generally the fair market value on the date the previous owner died.

Is Indian real estate reportable on FBAR?

Directly held foreign real estate is generally not reportable on FBAR or Form 8938, but the accounts your rent flows through can be. Your CPA decides.

Why are my foreign and Indian cost bases different?

Countries such as Canada and the US often use a date of death value. India uses the original cost or the 2001 value. Treaty relief prevents double taxation.