Double tax treaty and CGT

[leon2000]

I am selling a property in Ireland valued at 350,000 euro. I live in the UK. There is no mortgage but after some costs can be off set the REV.IE tax bill has been calculated at 89,000 euro based on the 33% CGT rate in ireland. Therefore, will I have paid enough tax to REV.IE to off set any tax due to HMRC? My accountant cannot give me an answer but did say this:

When you dispose of an asset held in ROI as a UK resident you are subject to their CGT rules and tax would be due on any calculated gain to the Rev Comm. As a UK resident you are also obliged to make a return to HMRC detailing the disposal under the UK CGT rules. When calculating the tax due to HMRC you would take into consideration the tax already deducted from proceeds at the source of the sale by the Rev Comm, regardless of the amount of tax paid.

You should note that if the tax due and paid to the Rev Comm is greater than that due to HMRC (due to variations in the calculating methods) you do not receive a refund from HMRC for the additional tax paid and similarly if the UK tax works out to be more than the calculated credit in the ROI then you would be liable to pay the difference arising to the HMRC.

Any guidance would be great, as its painful enough paying that much tax and I don't want any nasty surprises when I submit a return in the UK.
Thank you again

[darthblingbling]

Since 2010 I think HMRC practice is to allow the full amount of the foreign tax paid as an FTC even if the gain is different. I think your accountant is just confirming that you won't get a refund for the unutilised FTC.

Report the gain on your return under UK rules and claim the tax paid in Ireland as an FTC. Likely this will fully extinguish the UK tax due on the UK gain.

[darthblingbling]

Should emphasize when I say gain is different I mean gain calculated is different.

[maths]

Irish CGT is calculated under their tax rules (in euros).

UKCGT is calculated under UK tax rules. This means the capital gain is the difference between the base cost (in UK £) and the sale price (in UK £). The gain is in £ and CGT applied thereto. Any Irish CGT paid is converted into £ and then offset against the UK £ gain.