Good afternoon,
In 2006 I signed 5 Preliminary Agreements with a property developer in Poland to purchase 5 apartments. I have to-date paid a 10% deposit.
A long story short, the project has had a bumpy ride with the 2008 down turn. It is now approaching completion.
In this time I have decided to not take delivery of the apartments and to instead market them and sell 'the rights' of my agreements to the future owner and thus take a profit.
A simple example of the numbers -
My total contract prices - £2,000,000.00
Agreed total sale prices - £3,000,000.00
Total profit - £1,000,000.00
I have taken advice from an International Tax Planning Lawyer in Poland and he has confirmed that as I am UK tax resident and that the transaction is not a property transaction, it is deemed as a 'transfer of rights' and therefore I would have no tax liability in Poland.
I have also taken tax advice in the UK and it is less clear.
I have been told HMRC can possibly deem it as an 'Investment' and therefore the rate would be 18% / 28% Capital gains.
I have also been told HMRC can also possibly deem it as 'a dealing' and therefore tax it at the income tax rate 20% / 40% / 45%.
Since my Polish Tax advice has deemed no Tax is due in Poland, it has raised 'questions and possibilities' that no tax would be due in UK according to my UK tax adviser and accountant.
BUT of-course they all sit on the fence and do not give me a definitive answer to any of it.
I would really appreciate your insights into this.
Thank you all in advance.
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