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Where Taxpayers and Advisers Meet

CGT on a Foreign Property

annasproperty
Posts: 5
Joined: Thu Aug 23, 2018 4:06 pm

CGT on a Foreign Property

Postby annasproperty » Fri Jun 28, 2019 7:24 pm

Hi all,

I am a UK tax resident and I own a property abroad (EU) in which I lived before I moved to the UK 7 years ago. The property had been gifted to me prior to my move in 2004. The property is empty at the moment and I keep paying the service charge and the bills. I had it let for 12 months but the rental income didn't go over £1,000 in a tax year therefore no foreign income was reportable, nor UK tax was due to be paid.

I don't own a property in the UK, I've been renting this whole time.

My questions is: if I sell the aforementioned property, am I liable for the CGT on the profit that I make from the sale? I don't suppose it can be classed as my main residence as I haven't lived there in 7 years. However, it's not a buy-to-let property nor it is a second home that I own.

I would be most grateful for any advice.

darthblingbling
Posts: 296
Joined: Wed Aug 02, 2017 9:09 pm

Re: CGT on a Foreign Property

Postby darthblingbling » Fri Jun 28, 2019 8:42 pm

Yes but you may get some relief via PPR letting relief as it may have been your main residence at one point. But can't be considered your main residence once you moved out.

First concern is tax in the country where it's situated as they'll have first dibs on taxing rights.

Throw some figures at us, what are you likely to sell for ?

annasproperty
Posts: 5
Joined: Thu Aug 23, 2018 4:06 pm

Re: CGT on a Foreign Property

Postby annasproperty » Sat Jun 29, 2019 4:50 pm

Thanks for your reply.

Luckily, I'm not liable for the income tax in the country where the property is situated. 'm looking to sell it for £30k.

annasproperty
Posts: 5
Joined: Thu Aug 23, 2018 4:06 pm

Re: CGT on a Foreign Property

Postby annasproperty » Sat Jun 29, 2019 5:24 pm

Thanks for your reply.

Luckily, I'm not liable for the income tax in the country where the property is situated. I'm looking to sell it for £30k.
I lived in the flat for 8 years with the relative who had gifted it to me as per the terms of the written gifting agreement the we had - all in accordance with the contry's law. I've moved to the UK in April 2012 and my grandma kept living there until 2017. Then the flat was empty for over year. Current tenants are due to move out this August after a 12-month long tenancy.

Thanks a lot for your help.

hendersontax
Posts: 28
Joined: Wed Jun 19, 2019 5:04 pm
Location: Manchester
Contact:

Re: CGT on a Foreign Property

Postby hendersontax » Tue Jul 02, 2019 1:25 pm

As the property was gifted to you, your CGT base cost will be the market value of the property at the date of the gift. You'll then need to work out the gain (proceeds less market value at date of acquisition less costs) and assuming it is sold before April 2020, it sounds like you'll get private residence relief for the period you lived in it (8 years) plus lettings relief (12 months) plus the final period of ownership (18 months) - all of this is likely to mean that any taxable gain falls within your annual exemption (currently £12k). Note that if the property is sold after April 2020 then you won't get lettings relief as you weren't occupying the property with the tenant, and the exemption for the final period of ownership will reduce to 9 months - the detail of the new rules are due to be published next week. Hope that helps.
Tom Henderson ATT CTA
Henderson Tax Consulting
www.hendersontax.co.uk


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