UK resident to sell Belgian flat. Taxation(s) ?

[Drifter]

hello everyone,

I am resident in UK for 5 1/2 years in full-time employment as higher rate (40%) tax payer.
My wife is stay-at-home-mum, lives with me in UK, not in employment and not a tax payer.
Between us (shared ownership) we own an apartment in Belgium, bought with mortgage in 2004 as primary residence and was used as such until 2010 until we moved into UK.
Since then and to this moment this apartment is rented out to some family under long-term lease contract typical for Belgium.
Most of rental income is offset by mortgage monthly payments, landlord charges and by belgian cadastral taxes.
That's our only property in Belgium and we don't have any other income in there.

Thinking of selling it currently, however bit worried about capital gain CGT taxation (in both UK and Belgium!) and not sure where to get guidance from as googling returns really inconsistent and conflicting results. Wanted to make calculated decision....

thanks!

[maths]

Unlikely you will have a UK capital gains tax liability due to private residence relief; lettings relief; and the annual exempt amount.

Have no idea of tax exposure in Belgium.

If you are not UK domiciled (eg a Belgian citizen) any UK capital gain would in any event only be precipitated if you remitted any sales proceeds to the UK.

[Drifter]

thank you, Maths!

you mentioned residence relief - however we don't live there currently, but only in the past.
also you mentioned lettings relief - what are the details?

That's correct, I am Belgian citizen and I don't have non-dom status. On contrary, I am living 340+ day a year in UK and it is my primary residence.
Proceeds from apartment sale in Belgium I am going to use in France.

Who do you think can consult me as I want to make calculated decision and be 100% sure ?

thank you

[maths]

you mentioned residence relief - however we don't live there currently, but only in the past.
also you mentioned lettings relief - what are the details?

Not living there currently doesn't matter as it was once your private residence.
If you let your residence then for that period there is a UK capital gains tax charge but lettings relief reduces (or even removes) the charge. Relief can be as much as £40,000.

That's correct, I am Belgian citizen and I don't have non-dom status. On contrary, I am living 340+ day a year in UK and it is my primary residence.
Proceeds from apartment sale in Belgium I am going to use in France.

You sound as if you ARE non-UK domiciled; living here does not make you UK domiciled.

From a UK tax perspective reinvesting proceeds is irrelevant but I do know in some European countries it mat mean that no local capital gains tax charge arises.

Who do you think can consult me as I want to make calculated decision and be 100% sure ?

Need a Belgian tax adviser; should be straight forward advice ie cheap!!

[Drifter]

hi Math,
thank you again.

Could you please help me to understand

living here does not make you UK domiciled

.

I am confused because:
1. I am in in full-time employment with PAYE and salary is paid to high street British bank in mainland UK
2. every year I fill-in self-assessment with HMRC
3. I have extra-legal (non-obligatory) documentation from Home Office confirming my permanent residence in UK (in addition to my Belgian passport)
4. I consider myself permanent & fiscal resident in UK and I don't have a single piece of paper that say that I am non-domicile, and I am definitely nowhere near being oligarch

So, in other words, what makes me UK domiciled ? hm..... puzzled

[maths]

Assuming you were born legitimately then you would acquire a domicile of origin which would be the domicile of your father at birth
(if illegitimate, then you would at birth take mother's domicile).

Assuming your father was Belgian then prima facie you would acquire a Belgian domicile of origin.

This would stick unless:

1. you became an inhabitant of the UK (broadly resident with family, job, etc)

AND

2. you intended to make the UK your long term home.

If 1 and 2 are satisfied then you would acquire a UK domicile of choice (ie Belgian domicile of origin would be superceded).

Only you know your real INTENTION as to the future.

[parmy]

Hi Drafter,

Just found this post - I am in the exact same position as you (Belgian national, UK resident/domicile, own property in Belgium I'd like to sell with family members living in it).
I wondered if you had had any luck finding answers?
There is no capital gains tax in Belgium, this would mean the UK capital gains charge would apply on your sale, without you being able to claim tax relief for dual taxation (DTC between UK an belgium)?

Trying to work out whether I should be expecting a (potential) 28% capital gains tax on the sale.

Any additional info you may have found very welcome