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Old Mar 10th 2017, 9:45 pm   #1
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Default ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

***CAPITAL GAIN TAX / sold property abroad /dual citizenship

Hello
I hope someone had a similar situation or is familiar with that sort of issue, any help, advice appreciated…

I live in the UK, and I want to sell my house abroad. However I am not sure if I really should pay capital gain tax in my case as:
- the piece of land I received many years ago as a gift from parents in Slovakia
- over many years I built a house on it, never rented it, never lived there
- I live in the UK, having a dual citizenship, however I don’t own any property in the UK, I live only in a rented place and my house built in Slovakia is my only own property, so I really don’t understand why should I pay capital gain tax to HMRC at all if I want to sell it 28%!

Can anyone advice, or share experience what to do ? Thanks
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Old Mar 13th 2017, 8:41 am   #2
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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Originally Posted by super1 View Post
***CAPITAL GAIN TAX / sold property abroad /dual citizenship

Hello
I hope someone had a similar situation or is familiar with that sort of issue, any help, advice appreciated…

I live in the UK, and I want to sell my house abroad. However I am not sure if I really should pay capital gain tax in my case as:
- the piece of land I received many years ago as a gift from parents in Slovakia
- over many years I built a house on it, never rented it, never lived there
- I live in the UK, having a dual citizenship, however I don’t own any property in the UK, I live only in a rented place and my house built in Slovakia is my only own property, so I really don’t understand why should I pay capital gain tax to HMRC at all if I want to sell it 28%!

Can anyone advice, or share experience what to do ? Thanks
That depends on the double tax treaty between Slovakia and the UK (if any).
If you pay CGT in Slovakia then it is likely that no further CGT would be due.
The rate for UK basic tax payers is 18% (28% for higher rate taxpayers.
A friend of mine sold a property in Spain and paid CGT in Spain.
He normally does not complete a UK tax return and just didn't declare anything to HMRC.
He did have to justify the source of the money to his bank (i.e. proof of property sale) for anti-money laundering regulations.
HTH
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Old Mar 13th 2017, 3:41 pm   #3
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

but didnt your friend who sold a property lived in spain or lived and worked in uk, where his employer paid tax to HMRC, I understand he didnt do a self assessment?
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Old Mar 13th 2017, 4:21 pm   #4
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

The exemption for CGT in the UK is for your "primary residence" i.e. your home, end of story. You don't get a CGT exemption for another piece of property just because you don't own your own home.

You might want to look into "roll over relief" where under certain circumstances you can roll the gain into the purchase of another property.
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Old Mar 13th 2017, 8:16 pm   #5
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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but didnt your friend who sold a property lived in spain or lived and worked in uk, where his employer paid tax to HMRC, I understand he didnt do a self assessment?
His employer - or rather his pension provider only accounts for tax on his pension.
Pulaski is correct - your primary residence is where you live - even if it is rented. If you never lived there then it has never been your residence.
I thought that roll-over relief was only available to businesses.
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Old Mar 13th 2017, 8:51 pm   #6
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

what if I stop being a Uk tax payer and move it abroad and then sell the property? will I have to pay CGT on it to UK HMRC?
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Old Mar 13th 2017, 11:09 pm   #7
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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what if I stop being a Uk tax payer and move it abroad and then sell the property? will I have to pay CGT on it to UK HMRC?
You will be liable to the tax due in whatever country you become tax resident.
Some countries are more expensive than the UK.
In the UK, CGT is paid on the profit you make - not the sale price.
You include the cost of the land and the construction costs and deduct that from the sale price.
From that taxable profit you deduct £11,100 which is tax free - then you pay 18%.
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Old Mar 13th 2017, 11:15 pm   #8
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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.... In the UK, CGT is paid on the profit you make - not the sale price.
You include the cost of the land and the construction costs and deduct that from the sale price. ....
.... And indexation allowance, to adjust for inflation. Unfortunately the computation is in pound sterling, so the fall in the value of sterling will have increased the apparent value of non-sterling assets in a British tax return.
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Old Mar 13th 2017, 11:17 pm   #9
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

if I stop being a uk tax resident lets say on 1st August, then I am moving to another country to sell a property on 10th August .

in that case:
- I worked in the Uk in the tax year till 1st August, form sent to not be a Uk tax resident
- property sold on 10th August, CGT pain in the other country, where I live from 2 August onward?
-do I have to pay CGT in the UK in this situation?
-if I dont have to pay CGT to UK HMRC, then how long I am allowed to be in the other country before I get back to the Uk to work again?


thanks, trying to understand it as I was reading and reading HMRC website and rules and its not clear
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Old Mar 13th 2017, 11:23 pm   #10
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

Quote:
Originally Posted by super1 View Post
if I stop being a uk tax resident lets say on 1st August, then I am moving to another country to sell a property on 10th August .

in that case:
- I worked in the Uk in the tax year till 1st August, form sent to not be a Uk tax resident
- property sold on 10th August, CGT pain in the other country, where I live from 2 August onward?
-do I have to pay CGT in the UK in this situation?
-if I dont have to pay CGT to UK HMRC, then how long I am allowed to be in the other country before I get back to the Uk to work again?


thanks, trying to understand it as I was reading and reading HMRC website and rules and its not clear
You can't just leave the UK for five minutes to avoid evade paying CGT in the UK!

In order to avoid paying tax under the circumstances you describe you have to be out of the UK for at least a whole year, actually it might be a whole tax year -April to the following April. .... Back in the 1970's that was why British rock bands would go on a long world tour, to stay out of the UK for a whole year so as to establish non-domicilary status for tax purposes.

Certainly some people who move overseas to a low tax location, such as the Middle East, and who come back prematurely, end up with a whopping tax bill due in the UK because they weren't out of the UK long enough.
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Last edited by Pulaski; Mar 13th 2017 at 11:26 pm.
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Old Sep 11th 2017, 1:57 pm   #11
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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Originally Posted by cyrian View Post
That depends on the double tax treaty between Slovakia and the UK (if any).
If you pay CGT in Slovakia then it is likely that no further CGT would be due.
The rate for UK basic tax payers is 18% (28% for higher rate taxpayers.
A friend of mine sold a property in Spain and paid CGT in Spain.
He normally does not complete a UK tax return and just didn't declare anything to HMRC.
He did have to justify the source of the money to his bank (i.e. proof of property sale) for anti-money laundering regulations.
HTH

Appalling advice. Even with a double taxation agreement, GCT is still due for UK residents if the GCT in Spain/other country is less than the CGT in the UK. In other words Spain has first bite of the cherry and the UK has a second bite., The fact that your friend does not complete a UK tax return is meaningless. He has to declare even if nothing is due.

Recently someone avoided CGT tax (in Aldershot) and got a 2 year 3 month prison sentence.
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Old Sep 11th 2017, 1:58 pm   #12
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Default Re: ***CAPITAL GAIN TAX / sold property abroad /dual citizenship

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Originally Posted by beechmast View Post
Appalling advice. Even with a double taxation agreement, GCT is still due for UK residents if the GCT in Spain/other country is less than the CGT in the UK. In other words Spain has first bite of the cherry and the UK has a second bite., The fact that your friend does not complete a UK tax return is meaningless. He has to declare even if nothing is due.

Recently someone avoided CGT tax (in Aldershot) and got a 2 year 3 month prison sentence.
In addition you have to be out of the UK for a minimum of 5 years to avoid CGT
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