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Selling property and tax

Selling property and tax

Old May 13th 2022, 9:29 am
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Default Selling property and tax

Hi all,
My wife is Hungarian and is selling her house in Hungary. She has lived in the UK since 2006. We are led to believe she won't have to pay capital gains tax in Hungary as she's been the owner over 5 years. Does she still have to pay CGT in the UK as part of her tax return ?
Any advice would be much appreciated.


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Old May 14th 2022, 11:30 am
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Default Re: Selling property and tax

I assume based on you saying she has lived in the UK since 2006, she is UK resident for tax purposes, therefore you are required to pay capital gains tax on the selling of a home that is not your main home

So you will be taxed on the difference between the purchase price and the sale price.

You can deduct estate agent and solicitor fees as well as any building work you had to do to make it sellable.

Then you will pay tax on what is left ABOVE your capital gains allowance.. The current allowance is £12.300 for this tax year, single person or £24,600 for a married couple, So unless you had a really expensive Hungarian home, the tax should not be too bad



This is not financial advice. Please check with your tax authority

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Old May 14th 2022, 4:46 pm
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Default Re: Selling property and tax

Originally Posted by Jezzza View Post
Hi all,
My wife is Hungarian and is selling her house in Hungary. She has lived in the UK since 2006. We are led to believe she won't have to pay capital gains tax in Hungary as she's been the owner over 5 years. Does she still have to pay CGT in the UK as part of her tax return ?
Any advice would be much appreciated.


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from HMRC web site
https://www.gov.uk/tax-sell-property...rseas-property

You pay Capital Gains Tax when you ‘dispose of’ overseas property if you’re resident in the UK.UK residents who have their permanent home (‘domicile’) outside the UK may not have to pay UK tax on foreign income.

The same rules apply if you make any foreign capital gains, for example you sell shares or a second home.

Working out your domicile

Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you do not intend to return.
End quote

Your wife is probably domiciled in Hungary as changing domicile is not easy nor automatic. If your wife intends to return to Hungary one day (or says she will) her domicile will stay as Hungary which could mean that no or different CGT will be payable. You will need to ask a tax advisor to understand the rules and make sure you know what answers to give any questions HMRC may have because the wrong (or less advantageous answer) may result in CGT.

Don't delay because there are rules about promptly declaring CGT liability and automatic fines for late declaration. You can't wait until the end of the tax year!!!
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Old Jun 27th 2022, 3:48 am
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Default Re: Selling property and tax

Originally Posted by Jezzza View Post
Hi all,
My wife is Hungarian and is selling her house in Hungary. She has lived in the UK since 2006. We are led to believe she won't have to pay capital gains tax in Hungary as she's been the owner over 5 years. Does she still have to pay CGT in the UK as part of her tax return ?
Any advice would be much appreciated.


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Write to HMRC. I did that after selling my UK house. My understanding was no tax to pay as it was my permanent residence. HMRC confirmed my understanding.
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