capital gains on overseas property

[wood1e2]

As a general rule, if i pay no capital gains in the country my property is, would I pay no capital gains in the UK?

My understanding is I work out the Capital Gains on the property as if it was a UK property, then deduct any CGT paid in the country of the property. But as there isn't any there is no foreign relief.

And that just because there isn't CGT in overseas country, doesn't mean there isn't any CGT in UK?

 

[UK Contractor Accountant]

As a general rule, if i pay no capital gains in the country my property is, would I pay no capital gains in the UK?

no

taxed on worldwide gains if UK tax resident

 

[wood1e2]

Even with a double tax agreement, I initially thought I wouldn't pay Capital Gains as I am not liable in the country the property is based.

And with no CGT charged in country of porpertty, there is no 'Foreign Relief'!

 

[UK Contractor Accountant]

Why do you need foreign relief ? only gives you credit for tax paid abroad against your UK tax liability.

Just because one Country doesn't charge CGT (many tax havens don't) doesn't mean its not taxable in the UK if you are UK Tax Resident.

 

[Bobbo]

Even with a double tax agreement, I initially thought I wouldn't pay Capital Gains as I am not liable in the country the property is based.

And with no CGT charged in country of porpertty, there is no 'Foreign Relief'!

Whether the other country taxes capital gains is simply irrelevant.

The UK taxes them and if you are UK tax resident your worldwide capital gains will be taxed in the UK, unless there is anything contrary to this in the DTA.

Overseas capital gains can cause odd results due to exchange rates changing over time, so it's entirely possible to have a capital loss in the overseas country but a capital gain in the UK or vice versa.

 

[WaveJumper]

Tax when you sell property

Capital Gains Tax when you sell a property that's not your home: work out your gain and pay your tax on buy-to-let, business, agricultural and inherited properties

www.gov.uk

 

[wood1e2]

Tax when you sell property

Capital Gains Tax when you sell a property that's not your home: work out your gain and pay your tax on buy-to-let, business, agricultural and inherited properties

www.gov.uk

Well residence status is UK... I was just holding out hope that 0.00 CGT in overseas tax return meant there would be no CGT in UK tax return! As you cannot be double taxed .

But as overseas refunds cannot be used I presume that would include 'Overseas 0.00 CGT' can't be used so no 'Foreign Tax relief' and therefore i pay CGT in UK.

annoying as all the gain is in foreign exchange!! Hey Ho!

 

[WaveJumper]

A good friend of mine thought because he had paid all his overseas taxes he was in the clear HMRC had a different view and he ended up writing a rather large cheque after a two year investigation, best of luck.

 

[wood1e2]

A good friend of mine thought because he had paid all his overseas taxes he was in the clear HMRC had a different view and he ended up writing a rather large cheque after a two year investigation, best of luck.

I am paying the CGT... I was just double checking that I hadn't missed anything.

A brush with WDF is not something I would want to encourage