Tax on overseas property when sold
Oredian
Posts: 3 Newbie
in Cutting tax
My wife's parents passed away a few years ago and left her a property in Argentina. Her parents were Argentine citizens and lived there all their lives.
My wife is now considering selling the property to release value for helping our sons onto the property ladder.
She has dual citizenship but lives in the U.K.
Will she have to,pay tax on the money when it gets to her U.K. bank account?
My wife is now considering selling the property to release value for helping our sons onto the property ladder.
She has dual citizenship but lives in the U.K.
Will she have to,pay tax on the money when it gets to her U.K. bank account?
0
Comments
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If the property has gained in value since she inherited it capital gains tax will apply if the increase in value is in excess of her annual CG allowance of £11,300. If the property was rented out previous to that she should have been paying income tax on that.0
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Keep_pedalling wrote: »If the property has gained in value since she inherited it capital gains tax will apply if the increase in value is in excess of her annual CG allowance of £11,300. If the property was rented out previous to that she should have been paying income tax on that.
How would the HMRC know how much, if any, the increase in the value of the flat in Argentina was since the parents died?
Genuine question.'I'm sinking in the quicksand of my thought
And I ain't got the power anymore'0 -
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Keep_pedalling wrote: »They don't, but you have a duty report the gain and pay the tax due.
Really? Why?
Ok so if the OP's wife kept tabs on the market value at the time of the parents death then the value at the time it is to be sold (unlikely) why is the UK govt allowed to impose tax on that? More likely the Argentinian Govt is due taxes?
It was their home, Argentinian born, bred and lived for the whole of their lives, not a holiday home.
I genuinely can't get my head around your assertion?
This is property overseas and nothing to with HMRC at point of sale. The amount she brings in to the UK is relevant for tax purposes but what has that got to do with how much the property was worth in Argentina between the time of death and now?'I'm sinking in the quicksand of my thought
And I ain't got the power anymore'0 -
Really? Why?
Ok so if the OP's wife kept tabs on the market value at the time of the parents death then the value at the time it is to be sold (unlikely) why is the UK govt allowed to impose tax on that? More likely the Argentinian Govt is due taxes?
It was their home, Argentinian born, bred and lived for the whole of their lives, not a holiday home.
I genuinely can't get my head around your assertion?
This is property overseas and nothing to with HMRC at point of sale. The amount she brings in to the UK is relevant for tax purposes but what has that got to do with how much the property was worth in Argentina between the time of death and now?
Capital gains applies to the sale of any property anywhere in the world with the exception of your main residence. Yes there may also be tax payable in the country of sale and if that is the case you can claim relief against that.
https://www.gov.uk/tax-sell-property/selling-overseas-property
The OP said this was inherited property, it is not their home.0 -
because she is selling a property that she inherited sometime ago that may (or may not) have risen in value since she acquired itReally? Why?
it was not her home, she did not live in it whilst an owner. Her parents lived in it and she inherited it after their death
she may, or may not, be liable for tax in Argentina, given she is not a tax resident of Argentina, but appears to be a native thereof. Whether she still has tax domicile in Argentina (if they have such a concept) is a matter for her to find out
how much, if any, tax she has to pay arising from the differences between Argentinian and Uk tax law is defined very clearly in the tax treaty - she needs to read it
https://www.gov.uk/government/publications/argentina-tax-treaties0 -
Many thanks - your thoughts and the links have cleared the air for me. It seems that CGT would be payable upon a sale either here or in Argentina (since there is a double taxation agreement).
The difficult part now is to get a back dated valuation AND in a form that would be acceptable to HMRC.
Also, dealing with government offices in Argentina can be a nightmare but that will have to be faced since I expect they will ask for the tax first.0 -
From what I read in the internet, property has not exactly been doing that well in Argentina over the last few years, so there probably will not be anything to pay as there may be no or very little gain to be taxed.0
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Keep_pedalling wrote: »From what I read in the internet, property has not exactly been doing that well in Argentina over the last few years, so there probably will not be anything to pay as there may be no or very little gain to be taxed.
This may indeed be true, but as far as HMRC are concerned, the spot rate to sterling on the day needs to be used, so the strength of the peso is as material as the strength of their property prices.0 -
bob_bank_spanker wrote: »This may indeed be true, but as far as HMRC are concerned, the spot rate to sterling on the day needs to be used, so the strength of the peso is as material as the strength of their property prices.
Good point, although the peso has been struggling badly so chances are the OPs wife is looking at losses rather than gains.
http://www.xe.com/currencycharts/?from=GBP&to=ARS&view=5Y0
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