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TaxRobin
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I have lived in IoM for 3+ years, and am registered for Income

Resolved Question:

I have lived in IoM for 3+ years, and am registered for Income Tax here. My 2 brothers and I inherited some commercial property in the UK. I sold my one-third share to my two brothers in June 2103, and so instead of receiving a share of the rental (c. £5000 per year), I received £63,000 in cheques from them.

It now appears that I am due to pay Capital gains Tax on this transaction. Is this correct, and is there anybody whom I should approach to null this tax?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
Individuals who are not resident in the UK are not liable to capital gains tax on the sale of UK property unless they have been resident in the UK within the past five years.
As you have been in the IoM for only 3 years you would be liable for Capital gains tax on the sale.
The personal allowance for capital gains is £10,900 (€12,457) for the tax year 2013-2014.
Unfortunately they are correct and you would receive no tax treaty benefit either. I checked the tax treaty between the 2 countries and there is no provision for capital gains tax that would assist you.
Customer: replied 3 years ago.

Many thanks so far.


 


But is not true that the rental income I have foregone is just a simple agreement between myself and my 2 brothers for which they sent me monies from their own 'pockets)? To the best of my knowledge none of us have gone through a formal 'purchase/sale' process.


 


I look forward to hearing from you again.

Expert:  TaxRobin replied 3 years ago.
If you did not sell the property as you advised in the post :
"I sold my one-third share to my two brothers in June 2103, and so instead of receiving a share of the rental (c. £5000 per year), I received £63,000 in cheques from them."

Someone must have registered in the UK as ownership change somewhere or the UK would not have advised you on the capital gain tax responsibility.
Customer: replied 3 years ago.

Thanks again.


 


Please allow me to contact you again tomorrow after I have talked to my brother - the one who masterminds everything in his own amateur way, and his accountant (who does all the administration of rents etc.).



Cheers XXXXX XXXXX


PS: These things don't come easy to a very old man whose memory can oft-times be poor! Forgive me.

Expert:  TaxRobin replied 3 years ago.
You can always return.
The capital gains tax will not change for you. Unfortunately you have not met the 5 year requirement and the property is subject to capital gains tax.
Customer: replied 3 years ago.

Fine. Thank you.

Expert:  TaxRobin replied 3 years ago.
You are most welcome.
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15040
Experience: International tax
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