Sell rented holiday house in Cape town and transfer funds back to UK account. Tax to pay [Merged]

Daveblue1

The only reason we are selling is that I have recently been informed that I will be made redundant from my work. Only been there for a year and 5 months so no redundancy !

So we are now looking at selling our CT house,
We purchased the property at R500,000 of which 50% was on a bond and 50% transferred funds from the UK. 
The 50% transferred from UK was made up of savings and an extend loan on our UK mortgage (still paying back) .
The property has increased in value from R500k in 2004 to R1.9m today.
It's never been our primary residence.

Really unsure on the Capital gains tax and double taxation. I presume we will pay Capital gains tax in South Africa when the property is sold, also the cost of solicitors, estate agents and other cost.

Once the funds our deposited into our account (That’s another question should it be transferred into our SA account then sent to UK account or straight to the UK account?) is the tax and Capital gain taken from that or would it already be taken ?

I’m unsure what we may have left over.    

If we work on 11.8ZAR to the pound in 2004 (from XE's historic rates, 1st June 2004) and 20ZAR now, then it's increased in value from £42.4k to £93k now - so a capital gain of £50.6k ?.

The money from the sale will be to pay off our UK mortgage, which would take a load off my mind.

I need your help on this as it’s a large can of worms when you start searching on the net.

Thanks and keep safe

GDB2222

Could I suggest that you stick to the thread you already started on this topic, please? 

https://forums.moneysavingexpert.com/discussion/6287696/sell-our-rented-holiday-house-in-cape-town-and-transfer-funds-back-to-uk-account-tax-to-pay#latest

gingercordial

Since you've mentioned a few times about bringing money back to the UK versus leaving it in SA: by any chance are you a "non dom" claiming the remittance basis for UK tax?  As that would put a different spin on things.

I am sorry to hear of the redundancy and I know you will be looking to save money wherever possible, but spending a couple of £100 speaking to a real life tax adviser would be well worth it.

SusieT

I think thid thread should be in the taxation forum?

Daveblue1

GDB2222 said:

Could I suggest that you stick to the thread you already started on this topic, please? 

https://forums.moneysavingexpert.com/discussion/6287696/sell-our-rented-holiday-house-in-cape-town-and-transfer-funds-back-to-uk-account-tax-to-pay#latest

Hi Sorry It was suggested that I should place this on to this forum, just noticed it should have been on the taxation one. Sorry my head is all over the place at the moment, worried ect .       

Daveblue1

Hello 

I need some of your help and advice. I had posted a post on this but in the wrong forum been advised to place it on this one.

Original Post 

   https://forums.moneysavingexpert.com/discussion/6287696/sell-our-rented-holiday-house-in-cape-town-and-transfer-funds-back-to-uk-account-tax-to-pay#latest

The only reason we are selling is that I have recently been informed that I will be made redundant from my work. Only been there for a year and 5 months so no redundancy !

So we are now looking at selling our CT house,
We purchased the property at R500,000 of which 50% was on a bond and 50% transferred funds from the UK. 
The 50% transferred from UK was made up of savings and an extend loan on our UK mortgage (still paying back) .
The property has increased in value from R500k in 2004 to R1.9m today.
It's never been our primary residence.

Really unsure on the Capital gains tax and double taxation. I presume we will pay Capital gains tax in South Africa when the property is sold, also the cost of solicitors, estate agents and other cost.

Once the funds our deposited into our account (That’s another question should it be transferred into our SA account then sent to UK account or straight to the UK account?) is the tax and Capital gain taken from that or would it already be taken ?

I’m unsure what we may have left over.    

If we work on 11.8ZAR to the pound in 2004 (from XE's historic rates, 1st June 2004) and 20ZAR now, then it's increased in value from £42.4k to £93k now - so a capital gain of £50.6k ?.

The money from the sale will be to pay off our UK mortgage, which would take a load off my mind.

I need your help on this as it’s a large can of worms when you start searching on the net. I'm really new to this so any help would be appreciated 

Thanks and keep safe

Cook_County

You'll already be reporting the rental income to HMRC. The gain will be calculated using so exchange rates for purchase and sale. The UK will allow credit for SA tax on any doubly taxed gain.

brianposter

I think you need to find out what the South African double tax agreement actually means - some DTAs are readily comprehensible but the South African is not so. If you search hard you might be able to find someone at HMRC who will explain things.