CGT - Selling Property Abroad

[mcagun]

Capital Gains Tax advice needed

This is a 2 fold question on CGT

In 2010 I sold my only property here in the UK and did not make anything from it, in fact made a loss (separation), I just wanted rid of the joint mortgage arrangement

I have been renting in the UK ever since

I own 2 property deeds in the country of Belize

I now want to sell 1 of these properties and buy a property in the UK

My 1st question is this, do I have to pay CGT when I repatriate the money from the sale of this Belize property, if,,,,,
I re-invest it all in buying a property in the UK and renovating it to a habitable state.
Considering that I currently do not own property in the UK and I am domicile in the UK

2nd question is,,,,,,,,
The idea is to buy a wreck and renovate, then sell after 1 year and buy another and sell, re-investing the full amount, trying to grow this investment over about 10 year then sell up and use the money for my retirement

The property in Belize
Bought raw land in 2003 for £6000 ($9000us, at the time)
Gradually developed it over a period of about 10 year to its present state
Honestly, I have no idea how much I invested to develop the property to its present state, Belize is a cash culture, so no digital records.
The current rule of thumb is that it would cost about $100US per square foot to build a property
My property is 1800 ft/2
Plus a detached garage of about 400 ft/2
So a total of 2200, $220K US

I am hoping to get approx $180K us from the property (currently aprox £140K)

From 2010, I lived in the property for about 2 month a year, until 2015, when I started to live 6 months a year in the property

A bit complicated I know,,,sorry,,, hoping someone can help

Thanks in advance

[darthblingbling]

Yes CGT will be due in the UK.

Not sure what your second question is

[mcagun]

thank you for the reply

Yes it helps to define a 2nd question,, which is

How would the CGT be calculated on the scenario

Initially paid £6000 for the raw land ($9000us, at the time)
Gradually developed it over a period of about 10 year to its present state
Honestly, I have no idea how much I invested to develop the property to its present state, I did not keep records and Belize is a cash culture anyway, ie no receipts
At the time the rule of thumb was about $75 US Dollar per square foot to build
The current rule of thumb is that it would cost about $100US per square foot to build a like property

My property is 2200 sq/ft so at the lower end of the scale it would have cost me $165K US plus the land $6000 = $171K US

so my profit would be $9000 US on these figures

[jerome.lane]

If you sold your main home and it was always your principal private residence (PPR), then it would be treated as a no gain no loss situation, so you would not have any allowable losses.

Your property in Belize is likely to partly qualify as your PPR and therefore potentially relieved from CGT. As you have stated you always rented in the UK, it may be that you have not made the necessary election to treat the home in Belize as your PPR and HMRC could challenge any claim for PPR.

That said, if you only have a $9,000 gain, you are within your CGT annual exemption so won't pay any tax in any case. Since you can't prove the costs, I would recommend considering what your costs really were and how effective a claim for PPR relief would be.

Whether you buy another property or not, will have no bearing on whether you are liable to pay CGT. You will only pay CGT if you make gains in excess of the CGT annual exemption (£12,000) and you have no claim to PPR relief.