Not declared property abroad

Dodod

Helll everyone,

I co-own a property abroad that has been rented out. I have never received any income from the property as the other party does (they bought the property). When this person dies I will be inheriting their part and will most likely sell the property.

The problem is that i never declared the property when doing my taxes. Money was really tight for a number of years and I wasn't receiving any income from the property....in hindsight it was stupid bot ti declare It.

I'm just not sure what to do now....I've co-owned the property for almost 10 years and the other owner is getting on in age...as far as I am aware he's been paying the appropriate taxes in the country the property is in (which the other person has lived in for many years, he's not a UK national).

Can someone please help me solve this conundrum 

DE_612183

If you don't have any income - then you have nothing to declare.

The only issue might be if you said you were a First Time Buyer for Stamp Duty.

Or when you inherit the property in full you may have to pay inheritance tax, and if you sell capital gains tax - but I think that would only be relevant for the country the property is in.

Keep_pedalling

DE_612183 said:

If you don't have any income - then you have nothing to declare.

The only issue might be if you said you were a First Time Buyer for Stamp Duty.

Or when you inherit the property in full you may have to pay inheritance tax, and if you sell capital gains tax - but I think that would only be relevant for the country the property is in.

Inheritance tax would be dependant on the county but the OP would have UK CGT liability on 50% of the house if it was sold. 

Brie

Keep_pedalling said:

Inheritance tax would be dependant on the county but the OP would have UK CGT liability on 50% of the house if it was sold. 

bit of a hijack here......why would someone in the UK be subject to CGT for a property overseas?  Any legal bumpf you can reference for me please?!

DE_612183

Brie said:

Keep_pedalling said:

Inheritance tax would be dependant on the county but the OP would have UK CGT liability on 50% of the house if it was sold. 

bit of a hijack here......why would someone in the UK be subject to CGT for a property overseas?  Any legal bumpf you can reference for me please?!

Overseas assets

You may have to pay Capital Gains Tax even if your asset is overseas.

There are special rules if you’re a UK resident but your permanent home is not in the UK.

https://www.gov.uk/capital-gains-tax/what-you-pay-it-on

Nomunnofun1

Brie said:

Keep_pedalling said:

Inheritance tax would be dependant on the county but the OP would have UK CGT liability on 50% of the house if it was sold. 

bit of a hijack here......why would someone in the UK be subject to CGT for a property overseas?  Any legal bumpf you can reference for me please?!

UK residents are taxed on their world income. You would, of course, be able to claim credit for any foreign CGT paid up to the U.K. tax liability on that source of income. 

silvercar

DE_612183 said:

If you don't have any income - then you have nothing to declare.

The only issue might be if you said you were a First Time Buyer for Stamp Duty.

Or when you inherit the property in full you may have to pay inheritance tax, and if you sell capital gains tax - but I think that would only be relevant for the country the property is in.

You wouldn’t pay inheritance tax on inheriting the property. That tax would come from the estate of the deceased, but if the deceased wasn’t liability for UK tax it wouldn’t be relevant. 

If OP eventually sells, the CGT would be based on the increase in price from when OP acquired their half and the increases since the death of the other owner being the starting point for the increase in value of the second half.

I agree, up to now if there is no income there is nothing to declare.

NorthYorkie

Dodod said:

Helll everyone,

I co-own a property abroad that has been rented out. I have never received any income from the property as the other party does (they bought the property). When this person dies I will be inheriting their part and will most likely sell the property.

The problem is that i never declared the property when doing my taxes. Money was really tight for a number of years and I wasn't receiving any income from the property....in hindsight it was stupid bot ti declare It.

I'm just not sure what to do now....I've co-owned the property for almost 10 years and the other owner is getting on in age...as far as I am aware he's been paying the appropriate taxes in the country the property is in (which the other person has lived in for many years, he's not a UK national).

Can someone please help me solve this conundrum 

How do you come to be a 'co-owner' of this property if the other person actually paid for it? What was the intention behind this transaction? In other words, do you really own a share of this property or are you merely acting as some kind of 'bare trustee' (or whatever the equivalent might be in that foreign country)?

Who are the parties to the tenancy agreement (apart from the tenant him/herself)? If only the other owner, what agreement is there between him and you that he should keep the whole of the rents received? Again in other words, is he receiving your share of the rents as some kind of trustee on your behalf and, maybe, investing them abroad for your ultimate benefit?