Capital Gains Tax between Cyprus and UK

General questions & discussions on Cyprus property related matters
Post Reply
donotjudge
Posts: 21
Joined: 23 Feb 2021 20:57

Capital Gains Tax between Cyprus and UK

Post by donotjudge »

So, if I get gifted land from my father worth 1,000,000 Euros, and then I sell the land, what taxes do I pay? Do I pay UK capital gains tax, or do I pay Cyprus' CGT? I am a UK resident and not a Cypriot. I read that sometimes when gifted land no CGT is paid. Is this true?

Thank you for all the replies!
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Capital Gains Tax between Cyprus and UK

Post by Nigel Howarth »

Hi donotjudge

Capital Gains Tax is paid in the country where the gain is made. In your case Cyprus. But you will also pay CGT in the UK as you're a UK resident.

But you may be able to claim relief in the UK to get some of the tax you paid returned. I suggest yo talk to a tax specialist.

When property is gifted, the person making the gift doesn't pay CGT. But the person receiving the gift will pay CGT when they sell the property. Assuming your father acquired the land before 1980, CGT will be calculated on the sale price achieved less the land's 1980 taxable value as shown on its deed adjusted by inflation.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Pantheman
Posts: 807
Joined: 26 Jan 2008 14:44
Location: Famagusta District
Contact:

Re: Capital Gains Tax between Cyprus and UK

Post by Pantheman »

Nigel Howarth wrote: 26 Oct 2021 10:11 Hi donotjudge

Capital Gains Tax is paid in the country where the gain is made. In your case Cyprus. But you will also pay CGT in the UK as you're a UK resident.

But you may be able to claim relief in the UK to get some of the tax you paid returned. I suggest yo talk to a tax specialist.
Nigel, I thought that the double taxation treaty prevented the paying twice. Given also that the CGT in Cyp is 20% and in the UK 19%.

Do you know how it will be calculated there??
For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Real Estate Company. Reg. No. 1145, Lic. No. 572/E
Member of ETEK Registration No. A201999
https://www.fsbproperties.com
donotjudge
Posts: 21
Joined: 23 Feb 2021 20:57

Re: Capital Gains Tax between Cyprus and UK

Post by donotjudge »

Nigel Howarth wrote: 26 Oct 2021 10:11 Hi donotjudge

Capital Gains Tax is paid in the country where the gain is made. In your case Cyprus. But you will also pay CGT in the UK as you're a UK resident.

But you may be able to claim relief in the UK to get some of the tax you paid returned. I suggest yo talk to a tax specialist.

When property is gifted, the person making the gift doesn't pay CGT. But the person receiving the gift will pay CGT when they sell the property. Assuming your father acquired the land before 1980, CGT will be calculated on the sale price achieved less the land's 1980 taxable value as shown on its deed adjusted by inflation.

Regards,
There is currently a tax treaty between the two countries. I read through and it covers CGT. Does that mean if I pay UK tax on the gains, I will claim all the UK tax paid? Or claim back the Cyprus tax paid? I'm assuming all the UK paid tax will be returned as I paid it in Cyprus...

I calculated the inflation etc and 88,000 back then is worth 349,000today, so I deduct that, my 17k allowance, expenses and then tax that correct?

Thank you for your reply!
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Capital Gains Tax between Cyprus and UK

Post by Nigel Howarth »

H Pan & donotjudge,

donotjudge - I suggested you talk to a tax specialist as they will be able to give you a definitive answer. But I'm sure you'll have to pay CGT in Cyprus. To see how much CGT you'll pay in Cyprus, you'll find an online calculator at https://renospitros.com/tax_calculator.html

As for paying CGT in the UK, please see https://www.gov.uk/tax-sell-property/se ... s-property , which states that "You pay Capital Gains Tax when you ‘dispose of’ overseas property if you’re resident in the UK."

The question is, how much CGT will you pay in the UK. For that, you'll need to speak to a tax specialist.

Regards
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
donotjudge
Posts: 21
Joined: 23 Feb 2021 20:57

Re: Capital Gains Tax between Cyprus and UK

Post by donotjudge »

Hi Nigel, Thank you for your reply.

I will pay 12-19% tax in the UK but then claim it back as there is a tax treaty between the UK and Cyprus.

I will have to see what the valuation is.

Thank you!
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Capital Gains Tax between Cyprus and UK

Post by Nigel Howarth »

Hi donotjudge

I believe it works the other way around - you pay CGT in Cyprus first - and then pay CGT in the UK less the amount you paid in Cyprus.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Capital Gains Tax between Cyprus and UK

Post by Nigel Howarth »

One other thing - you'll need to get a tax number in Cyprus to pay the Capital Gains Tax here. You'll find the form at https://www.mof.gov.cy/mof/TAX/taxdep.n ... penElement

Cheers,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
donotjudge
Posts: 21
Joined: 23 Feb 2021 20:57

Re: Capital Gains Tax between Cyprus and UK

Post by donotjudge »

Nigel Howarth wrote: 28 Oct 2021 09:17 Hi donotjudge

I believe it works the other way around - you pay CGT in Cyprus first - and then pay CGT in the UK less the amount you paid in Cyprus.

Regards,
Ah, apologies, I forgot to mention that yes, I pay CGT in Cyprus, and then pay CGT in the UK, and then claim back the CGT I paid in the UK so there is no double taxation, leaving me with only paying the Cyprus CGT. I will also look into obtaining the tax number! Thank you very much.
Post Reply