CGT on Sale of Inherited Property
Sep 21st 2023, 1:50 pm
#31
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Re: CGT on Sale of Inherited Property
It's the VPT that's used.
Sep 21st 2023, 2:20 pm
#32
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Sep 21st 2023, 5:06 pm
#34
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Re: CGT on Sale of Inherited Property
You'll probably be needing that one quite a bit.
Has it dawned on you yet that you and your brothers may end up paying different amounts of tax despite inheriting equal fractions of the property?
And something you mentioned earlier - about the VPT having been revised upwards recently probably won't be of any benefit to you, since it is the VPT in the year of the inheritance which is the figure used (as opposed to the VPT at the time of any subsequent sale).
Has it dawned on you yet that you and your brothers may end up paying different amounts of tax despite inheriting equal fractions of the property?
And something you mentioned earlier - about the VPT having been revised upwards recently probably won't be of any benefit to you, since it is the VPT in the year of the inheritance which is the figure used (as opposed to the VPT at the time of any subsequent sale).
Feb 16th 2024, 2:45 pm
#35
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Re: CGT on Sale of Inherited Property
I thought that you could get a revaluation every 3 years. CGT on sale of property as a non PT resident is now same as PT resident (if you want).
That would mean instead of simple 28% on the gain, you could elect to pay CGT on 50% of the gain, but you would need to tell Financas if your worldwide income so that the 2 can be added together to give a tax rate, so all depends on the figures. If resident of UK the sale would need to be declared in UK with HMRC and CGT paid there as well. But any tax paid in PT would be deducted if the Tax in UK is higher than PT. As you have never lived in the flat it would be hard to prove that is your principal residence of ou could have claimed PPR in UK and paid zero CGT
That would mean instead of simple 28% on the gain, you could elect to pay CGT on 50% of the gain, but you would need to tell Financas if your worldwide income so that the 2 can be added together to give a tax rate, so all depends on the figures. If resident of UK the sale would need to be declared in UK with HMRC and CGT paid there as well. But any tax paid in PT would be deducted if the Tax in UK is higher than PT. As you have never lived in the flat it would be hard to prove that is your principal residence of ou could have claimed PPR in UK and paid zero CGT
Feb 16th 2024, 2:56 pm
#36
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Re: CGT on Sale of Inherited Property
You'll probably be needing that one quite a bit.
Has it dawned on you yet that you and your brothers may end up paying different amounts of tax despite inheriting equal fractions of the property?
And something you mentioned earlier - about the VPT having been revised upwards recently probably won't be of any benefit to you, since it is the VPT in the year of the inheritance which is the figure used (as opposed to the VPT at the time of any subsequent sale).
Has it dawned on you yet that you and your brothers may end up paying different amounts of tax despite inheriting equal fractions of the property?
And something you mentioned earlier - about the VPT having been revised upwards recently probably won't be of any benefit to you, since it is the VPT in the year of the inheritance which is the figure used (as opposed to the VPT at the time of any subsequent sale).
Feb 16th 2024, 4:12 pm
#37
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Re: CGT on Sale of Inherited Property
Hi again... OP here! So the property has sold and we're just trying to tidy up the CGT liability to be filed in 2025. In above statement are you saying that tax is payable in PT on both capital gains and worldwide income, or that these figures are added to establish the rate band, but that tax is only paid on the capital gain? Hopefully that makes sense!
Assume that in UK this is treated as Inheritance tax if applicable, rather than capital gain??
Feb 17th 2024, 8:58 am
#38
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Re: CGT on Sale of Inherited Property
Feb 17th 2024, 9:28 am
#39
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Re: CGT on Sale of Inherited Property
hi, sorry for any confusion.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
Feb 17th 2024, 9:43 am
#40
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Re: CGT on Sale of Inherited Property
hi, sorry for any confusion.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
As you say I think we will need an accountant - I made some enquires a while back and I was getting quotes of 650 euros to calculate and file. This would be fine if we had significant pot, but because of the low sale value of the property and the very low initial value being used (the VPT) the CGT liability is a very high proportion of a relatively small sum. And being 4 of us the accountancy fees would erode a big chunk of the value.
If anyone knows of a reliable and preferably inexpensive accountant I'd be delighted to receive contact details.
The estate agent who dealt with the sale said its perfectly possible to file and pay the CGT ourselves online. Leaving aside the maths for a moment does anyone know anything about the practicality of how this is done? We had a look at the financas portal and couldnt really find anything about CGT.
Feb 17th 2024, 9:57 am
#41
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Re: CGT on Sale of Inherited Property
I dont know for sure, but as there is no Capital Gain tax per se, (unlike UK) any personal tax comes under the general tax rates that you are already aware of.
Not to complicate your situation any more, I do not know what the PT taxman includes as personal income in this case, as there is more than one person. Inless you are allowed (or just say) that there is only one person receiving any money
Maybe someone else knows if they want the total income of all??
I must admit to not knowing if this situation is considered as inheritance in the UK, rather than CGT.
Not to complicate your situation any more, I do not know what the PT taxman includes as personal income in this case, as there is more than one person. Inless you are allowed (or just say) that there is only one person receiving any money
Maybe someone else knows if they want the total income of all??
I must admit to not knowing if this situation is considered as inheritance in the UK, rather than CGT.
Feb 17th 2024, 11:01 am
#42
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Re: CGT on Sale of Inherited Property
I dont know for sure, but as there is no Capital Gain tax per se, (unlike UK) any personal tax comes under the general tax rates that you are already aware of.
Not to complicate your situation any more, I do not know what the PT taxman includes as personal income in this case, as there is more than one person. Inless you are allowed (or just say) that there is only one person receiving any money
Maybe someone else knows if they want the total income of all??
I must admit to not knowing if this situation is considered as inheritance in the UK, rather than CGT.
Not to complicate your situation any more, I do not know what the PT taxman includes as personal income in this case, as there is more than one person. Inless you are allowed (or just say) that there is only one person receiving any money
Maybe someone else knows if they want the total income of all??
I must admit to not knowing if this situation is considered as inheritance in the UK, rather than CGT.
Last edited by macliam; Feb 17th 2024 at 11:04 am.
Feb 17th 2024, 1:14 pm
#43
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Location: Arcos de Valdevez "Onde Portugal se fez"
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Re: CGT on Sale of Inherited Property
hi, sorry for any confusion.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
Again as I understand it, as a non resident of PT you have the choice of methods of taxation in this case.
1) Pay a simple 28% on the whole of the agreed Taxable Capital gain, or
2) Pay tax at the `nominal tax rate` of ......(a) 50% of the Agreed taxable amount + (b) worldwide income.
The summation of (a+b) is used to obtain the actual tax rate to be applied, but Tax is payable only on the actual capital gain amount (not income)
Method 2 merely puts you in the same position as a tax resident, but of course they would pay tax on both.
Method 1, is what the situation was like (and still is if chosen) for non residents.
But of course suggest you speak with a good accountant familiar with both PT and UK tax rules.
As of 2023, it became obligatory to declare worldwide income and have CGT calculated taking that into account. There is no longer any option to do otherwise, regardless of country of residence.
(It occurred because of a change in PT tax law brought about by decisions in the ECJ, who adjudiated that despite the fact that there was a facility for residents of EU countries to opt for the equal treatment, it was still discriminatory. And don't forget, that option did only exist for EU residents in any case, and that the UK is no longer a member of the EU, as a result of that unfortunate accident back in 2016.)
Feb 17th 2024, 1:30 pm
#44
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Re: CGT on Sale of Inherited Property
[...]The estate agent who dealt with the sale said its perfectly possible to file and pay the CGT ourselves online. Leaving aside the maths for a moment does anyone know anything about the practicality of how this is done? We had a look at the financas portal and couldnt really find anything about CGT.
If you were familiar enough with the lingo, it would definitely be a possibility because although it might involve a bit of work collating and converting amounts, the actual reporting is fairly straightforward. But you do need to know what to put where and check all the right boxes. There are online guides in Portuguese to doing this stuff, which probably detail the process well enough although I haven't delved into any of them to find out whether they cover all of the relevant circumstances in your case.
Feb 17th 2024, 5:14 pm
#45
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Re: CGT on Sale of Inherited Property
You are slightly behind the times here.
As of 2023, it became obligatory to declare worldwide income and have CGT calculated taking that into account. There is no longer any option to do otherwise, regardless of country of residence.
(It occurred because of a change in PT tax law brought about by decisions in the ECJ, who adjudiated that despite the fact that there was a facility for residents of EU countries to opt for the equal treatment, it was still discriminatory. And don't forget, that option did only exist for EU residents in any case, and that the UK is no longer a member of the EU, as a result of that unfortunate accident back in 2016.)
As of 2023, it became obligatory to declare worldwide income and have CGT calculated taking that into account. There is no longer any option to do otherwise, regardless of country of residence.
(It occurred because of a change in PT tax law brought about by decisions in the ECJ, who adjudiated that despite the fact that there was a facility for residents of EU countries to opt for the equal treatment, it was still discriminatory. And don't forget, that option did only exist for EU residents in any case, and that the UK is no longer a member of the EU, as a result of that unfortunate accident back in 2016.)