Dubai

[regiment]

A retired couple have generated a very substantial CGT liability on their 3 buy to let properties but cannot face the prospect of moving overseas for 5 years to avoid this liability on the sale.

An adviser has informed them that they need to spend only one year in Dubai to achieve the same result.

I am concerned for them as it would seem to me quite unlike the Inland Revenue to make such an exception solely in the case of Dubai, or any other overseas destination for that matter

Do the experts agree with my opinion that the advice they have been given is dubious?

[johnfkavanagh]

It is possible to avoid UK CGT without spending 5 years abroad by moving to a jurisdiction with which the UK has a suitable double tax treaty for a shorter period )although usually at least one year) and making the disposal while resident for treaty purposes in that jurisdiction. The provisions of double tax treaties override domestic law so the Inland Revenue has to put up with their consequences, whether they like them or not!

However, the UK does not have a double tax agreement with Dubai so I rather share your view that the advice they have been given should certainly be viewed with caution.

John Kavanagh
www.uktaxconsulting.co.uk
mail@uktaxconsulting.com

[Graham1]

I have no knowledge of taxation.

I visited the EXCEL Property Investors Show and in a seminar, heard something like..

One could gain Dubai residence (few conditions) by simply owning a property there (they can be bought cheaply for about 25K), and spending only 24 hours there.

The speaker went on to say, this was a way of not paying UK CGT, however the new Dubai resident will still have to remain outside the UK for 5 years.

The benefit being 'they' could travel the world (or remain in Dubai for 5 years) ensuring they complied with the visited countries CGT laws.
The speaker highlighted this would perhaps be very expensive.

[johnfkavanagh]

Thank you, Graham, for your contribution. What you say makes perfect sense from the tax point of view but the couple to whom kag referred would not be helped because they would still have to remain resident outside the UK for the 5 year period. Maybe their adviser was also in the audience at the seminar but was not as attentive a listener as you!?

John Kavanagh
www.uktaxconsulting.co.uk
mail@uktaxconsulting.com