XETRA shares - UK CGT?
XETRA shares - UK CGT?
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M Powered

Original Poster:

349 posts

226 months

Tuesday 18th October 2011
quotequote all
I'm sure this is a simple answer, but would XETRA shares be subject to German CGT if invested through a Stocks/Shares ISA instrument by a UK resident? I can't seem to find a straight answer online.

M Powered

Original Poster:

349 posts

226 months

Wednesday 19th October 2011
quotequote all
Bump for the morning crowd. Any thoughts?

Eric Mc

124,085 posts

282 months

Wednesday 19th October 2011
quotequote all
Are you a UK tax resident or a German tax resident?

M Powered

Original Poster:

349 posts

226 months

Wednesday 19th October 2011
quotequote all
UK resident.

Eric Mc

124,085 posts

282 months

Wednesday 19th October 2011
quotequote all
The normal rule is that the individual is subject to tax in the country of which they are "tax resident" - in your case, the UK. Therefore any gain on overseas share disposals would be subject to UK CGT regulations - including any exemptions or allowances that operate on gains receivbed by UK tax residents.

HOWEVER, there may be rules in Germany which require that German tax be deducted on such a gain. You would need to speak to an oversseas tax expert to find out how the German tax authorities treat such transactions and how credit is given to non German residents for any such tax paid.

M Powered

Original Poster:

349 posts

226 months

Thursday 20th October 2011
quotequote all
Eric Mc said:
The normal rule is that the individual is subject to tax in the country of which they are "tax resident" - in your case, the UK. Therefore any gain on overseas share disposals would be subject to UK CGT regulations - including any exemptions or allowances that operate on gains receivbed by UK tax residents.

HOWEVER, there may be rules in Germany which require that German tax be deducted on such a gain. You would need to speak to an oversseas tax expert to find out how the German tax authorities treat such transactions and how credit is given to non German residents for any such tax paid.
Thanks Eric. It would appear that no such expert exists on PH then.

Eric Mc

124,085 posts

282 months

Thursday 20th October 2011
quotequote all
M Powered said:
Thanks Eric. It would appear that no such expert exists on PH then.
LC23 seems to be aquainted with some aspects of overseas taxation.

To be honest, very few accountants can be expected to be well versed in the taxation rules of foreign countries. It's hard enough keeping up with UK tax law.

Some of the larger firms will have specilaists in other countrirs' rules - and will indeed have offices in some other countries too. But you will pay for that type of advice.

LC23

1,300 posts

242 months

Saturday 22nd October 2011
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http://www.hmrc.gov.uk/manuals/dtmanual/DT8007.htm

Article 8(3) of the UK/German DTT. Taxable only in the country of residence. But as Eric said, Germany may still have withholding tax that you need to claim back. Depends on their rules.

Also I assume you are domiciled in the UK otherwise you may not be liable to UK CGT on non UK sited assets.