Selling property abroad, do I need to pay UK CG tax ?

cacaolat

Hi
I have owned some land in Italy since 1989, when it was given to me by my later father. It is building land but it has yet to be developed.
I am now in the process of selling it to a developer.
Although I am a citizen of another EU member state, I have been resident in the UK since 2008. (here much longer though)
I have already paid the Italian tax for the sale of the property. because some years ago there was some sort of concession I could pay the tax at a reduced rate now and then.
The money I would like to transfer to the UK to buy a property.
Do i have to pay any UK tax on this ?

Cook_County

If you pay UK tax on the arising basis you report worldwide income and gains. If you elect the remittance basis you pay tax on income & gains remitted to the UK. How do you file in the UK?

cacaolat

Hi Cook County
I pay part of my tax through my wages and another part through my annual tax return. My foreign property is not really known to the tax man as I have not really earned anything with it....I just had lots of expenses court case for access rights etc.

Cook_County

So will you file on the arising or the remittance basis for the year of sale?

cacaolat

although I know what arising means...I am not sure...sorry
I just do an ordinary self assessment tax return because of my additional income from a UK property...additional to my wages as an employee...
but I know that I pay the first part by the end of January and the second part by the end of July.

Cook_County

It sounds as if you are completing your UK tax return wrongly given that you are not UK domiciled but do not take account of this on your return. Take professional advice.

cacaolat

I had a look at the HMRC website to see how they define domiciled and not domiciled. Although foreign, I am domiciled in the UK as I have my main home here. In fact for work and tax I have been for over a decade, I said since 2008 because thats when I finally told the Italian authoriies that I am not living there anymore.

jennifernil

I suppose you could report the gain and then claim relief for the tax paid in Italy.

You would need to fill in the capital gains pages and then the foreign pages to claim the relief (I only do paper returns!) The help notes are useful.

Cook_County

Being resident in the UK for 10 years does not make you domiciled in one of the countries of the United Kingdom. You may want to read HMRC 6 again - although this is only HMRCs view of case law so not necessarily what a Court would agree with.

If you are indeed domiciled here you report worldwide income and gains on the arising basis.

cacaolat

Thank you HMRC 6 was very useful to finally explain me the difference between domicile and residence....very useful
I may really visit a tax adviser before selling ,y property

property.advert

If a tree falls in the woods but there is no-one around, does it make a sound ?

When the UK government knows what property you sell through lawyers in other parts of the world you'll know the end has come. For now, the less said the better.