Selling property abroad...tax implications
Discussion
sideways sid said:
The practical answer to this specific question depends on where you want to spend the proceeds.
If you expect to want to spend money there, leave it there.
Remember that CGT is only payable if you choose to report the gain.
Not fully correct. My understanding is that the transaction must be reported to HMRC:If you expect to want to spend money there, leave it there.
Remember that CGT is only payable if you choose to report the gain.
a. if the gain on sale exceeds the CGT allowance in tax year that the property is sold,
.
and also
b. If the gain exceeds four times the CGT allowance for the year in question.
R.
Eric Mc said:
Assuming the property is a residential property, you will have 30 days in which to report the sale and pay the tax.
I asked my account this question and he reckons .../// The requirement to report and pay UK CGT tax within 30 days only applies to property situated in the UK.
The capital gain on your French property will need to be reported on your 2021/22 tax returns. /////
Wouldn't CGT need to be paid to the Portuguese authorities in the first instance?
I inherited my Dad's house in the Algarve (his only residence) and am having to pay CGT in Portugal (and they base it on an original property value that they seem to pull from the air which is much lower than the figure he actually bought it for - but apparantly this is normal because I am selling the house and not my Dad, ie not the original purchaser?!)
Apologies for the slight thread derail but the whole sysytem over there seems odd.
I inherited my Dad's house in the Algarve (his only residence) and am having to pay CGT in Portugal (and they base it on an original property value that they seem to pull from the air which is much lower than the figure he actually bought it for - but apparantly this is normal because I am selling the house and not my Dad, ie not the original purchaser?!)
Apologies for the slight thread derail but the whole sysytem over there seems odd.
river_rat said:
they base it on an original property value that they seem to pull from the air which is much lower than the figure he actually bought it for
This is an odd quirk you find in lots of Continental European countries. There is some concept of cadastral / assessed value which is used for tax calculations that lags the market value, particularly when prices have recently risen quickly. It usually saves you money on the way in (transfer taxes and annual property taxes), but it can hurt on the way out.NickCQ said:
This is an odd quirk you find in lots of Continental European countries. There is some concept of cadastral / assessed value which is used for tax calculations that lags the market value, particularly when prices have recently risen quickly. It usually saves you money on the way in (transfer taxes and annual property taxes), but it can hurt on the way out.
Yes that sounds right - thing is he bought the house when brand new, so I really don't see how they can use some other random figure for CGT, but can't do much about it!anonymous said:
[redacted]
You BELIEVE you’ve made a £30k gain - that’s only if you sell for £100kRemember you jointly have what £25-26k annual capital gains tax allowance.
Have you spent anything on the property as allowable costs that can be deducted from the gain?
However I think the fact you might only have a total gain of £5k then you pay the 28% on that value.
Welshbeef said:
You BELIEVE you’ve made a £30k gain - that’s only if you sell for £100k
Remember you jointly have what £25-26k annual capital gains tax allowance.
Have you spent anything on the property as allowable costs that can be deducted from the gain?
However I think the fact you might only have a total gain of £5k then you pay the 28% on that value.
Legal fees and estate agency and other professional costs at time of both purchase and sale will believably eat up £5k so nothing to pay. Remember you jointly have what £25-26k annual capital gains tax allowance.
Have you spent anything on the property as allowable costs that can be deducted from the gain?
However I think the fact you might only have a total gain of £5k then you pay the 28% on that value.
Groat said:
Welshbeef said:
You BELIEVE you’ve made a £30k gain - that’s only if you sell for £100k
Remember you jointly have what £25-26k annual capital gains tax allowance.
Have you spent anything on the property as allowable costs that can be deducted from the gain?
However I think the fact you might only have a total gain of £5k then you pay the 28% on that value.
Legal fees and estate agency and other professional costs at time of both purchase and sale will believably eat up £5k so nothing to pay. Remember you jointly have what £25-26k annual capital gains tax allowance.
Have you spent anything on the property as allowable costs that can be deducted from the gain?
However I think the fact you might only have a total gain of £5k then you pay the 28% on that value.
OP your issue is solved.
Now sell it for the maximum price possible
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