Capital Gains Tax

[jan!]

Hi I have 2 queries re Capital Gains Tax.
I know property sales in Cyprus are subject to 20% Capital Gains Tax minus deductions.Can members please give me an idea of what additional Capital Gains Tax they have had to pay upon returning to the UK.
Also when we first came to Cyprus 7 years ago our UK accountant muted that it would be in our interest tax wise if we sold our property not to return to the Uk to live until the following tax year. Can you confirm this and what are the benefits please of doing so? Many thanks

[Nigel Howarth]

Hello Jan! and welcome to the forum.

I haven't heard from anyone who has been asked to pay Capital Gains Tax to the UK Inland Revenue from gains made in Cyprus (and I've been answering questions on property issues since the late 1990s).

Generally speaking, Capital Gains Tax is paid in the county where the capital gain is made (Cyprus) - and that's it.

I recall some years ago that Gordon Brown as Chancellor in the Labour Government tried to get Brits who had returned from Belgium after selling their homes to pay Capital Gains Tax in the UK - but I don't know if he was successful. (I believe that in Belgium you do not pay Capital Gains Tax on a property if you have owned it for more than five years).

There's quite a bit of information on the HM Revenue & Customs website - starting at http://www.hmrc.gov.uk/cgt/property/basics.htm

My guess is that if you were resident in Cyprus (ie. you'd registered with immigration and paid you taxes here) you wouldn't be liable for CGT on profits arising from the sale of your property here to the UK Inland Revenue.

This is a subject on which you will need to take professional advice.

Regards,

[Pantheman]

Nigel, resident or not, everyone pays CGT on profits minus deductions.
If you pay CGT in Cyprus you will not pay it in the uk. That is mainly because the CGT is 18% ie less than in Cyprus. My understanding is however, if it were more you would be paying the difference.
I cannot answer the second half of you question, i guess it all depends what you put on your tax return.
HTH

[kanita]

I wish you luck - you will need it ! My advice to anybody buying property is to use somebody local, and not to use an agent where a single viewing will take a round trip of 4 hours, just for the traveling. I do not know many agents who will be very keen on promoting a property this far away from their offices. Happy Christmas