quyn1970

Sold my house in UK in Nov 2015 and urgently need advice on CGT and how to report it in my Canada tax return.

Shirtback

You shouldn't have to pay twice.

I *think* this is the info you need (& there's a link to the form you need to complete):
Line 405 - Federal foreign tax credit

Snowy560

If you sold your house in November 2015 there probably won't be any CGT liability as far as HMRC are concerned (as they state on the website that if you sell before October 2016 you most likely won't have anything to pay). However, as a non resident, you do need to report the sale within 30 days (which I didn't but have now done). I started another thread about this very recently with the links to the relevant HMRC pages:

http://britishexpats.com/forum/canad...report-875636/

CGT in Canada: we're reporting here but we're using an accountant for our taxes this year.

S

quyn1970

Thanks for the feedback

Are you using a specialist accountant for Xpats or just an HR Block type.

I am using Turbo tax as I have been but just need advice on what to fill in.

Snowy560

We used HR Block for a few years. The woman we went to was recommended to us. She was okay actually and got the job done. She does have US tax filing qualifications (which is obviously different from the UK) but I suppose we we felt she was used to seeing a lot of clients with foreign income etc.

However, because of the house sale and various other things, we decided to use an accountant this year. I'm kind of unsure about whether we did the right thing and am right now wishing we'd just gone back and seen the same person at HR Block. I think (like most things in life) it depends on the actual person who you end up seeing there.

Most people on here seem to do it themselves which is great. Ours is quite "bit-ey" so I don't feel confident. I'd like to and perhaps will do so next year.

S

Shirtback

I personally wouldn't go anywhere near HR Block with a bargepole, but that's down to bad experience & having researched it's so-called "training" programs/requirements. I.e. It's unlikely you'd get someone who has any clue about anything overseas .

If you've paid CGT tax to HMRC, & need to claim a foreign tax credit, you should have a look at the link I gave you; I don't use Turbotax, but Studiotax allows me to access & download additional forms pertaining to non-standard situations.

Jonboy might be able to help, I hope he looks in on this thread.

quyn1970

Are you going to have to pay CGT in Canada even if you are not paying in UK?

Snowy560

Yes. We will have to pay some CGT in Canada

And we wanted to be absolutely sure the calculations are done right and that we haven't missed anything.

You can fairly easily see from the links I provided on the other thread as to whether you have a CGT liability in the UK (I doubt it unless you never lived at the property). But HMRC will tell you when you use the online form to report the sale. Have you done this?


S

PS: I had an OK experience with HR Block but we went to see a specific person others had had experience with. And clearly I am not that confident so choosing to see someone else this year.

JonboyE

You need to complete schedule three. Put the address where requested. Column 1 is year acquired. This is the year you moved to Canada. Column 2 is proceeds of disposition. This is the sale price converted at the rate on the day of sale. Column 3 is the adjusted cost base. This is the market value of the home of the day you moved to Canada converted at the exchange rate on that day. Column 4 is for the estate agent and lawyer's fees converted at the rate on the day of sale. Column 5 is your capital gain: column 2 less columns 3 and 4. Carry this down to the bottom of the schedule and divide by 2. The product goes on line 127 of your tax return.

quyn1970

Thanks. Will fill that in tonight and see where I end up. I was always under the impression that I would not need to pay CGT in Canada as I had no liability to pay CGT in the UK. Seems I was wrong and will need to pay in Canada regardless of my liability in the uk.

Snowy560

Yes, what you now think is correct and is my understanding.

S

Siouxie

You are just brilliant!

Thank you so much Jonboy - I've a mind to add this to the wiki!

JonboyE

I suppose I should add that there are several sections on schedule 3. This should go in section 4. Real estate.

quyn1970

I unfortunately did not get my house valued when I left the UK. How do I prove what the place was worth when I left? Have asked the estate agent that sold it to provide me with a value but not sure if CRA will accept that. The higher the value 4 years ago the better of course.

JonboyE

It is a lot better than nothing.