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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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What is the position of selling a property in a foreign country

Resolved Question:

What is the position of selling a property in a foreign country (Mauritius) where they have no CGT liability and transferring the funds to the uk. Also how does double taxation works in this case, as my understanding is that if the asset is disposed of in the country and if they had CGT liability then that would be payable in that country and one would not be taxed again in the UK. I am resident in the UK resident & taxpayer.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Hi.

Assuming you are UK domiciled, ie a UK national, you are taxable on your income and gains from wherever in the world they are derived and regardless of whether the income or gains are brought into the UK. There are different rules for non-UK nationals living in the UK who have non-UK source income.

 

According to Article 13 of the UK/Mauritius double tax treaty, gains from the disposal of what the tax treaties refer to as "immovable property", a term which can include homes may be taxed in the country in which the property is situated. That means any gain you make may be taxed in Mauritius. Article 6 defines immovable property.

 

If you do make a gain when you sell the property, it will be taxable in the UK but you will get credit for any tax paid in Mauritius on the same gain under Article 24 of the tax treaty against your UK CGT liability.

 

You can find more details on the meaning of the clauses in most tax treaties here. Immovable property is more clearly defined here.

 

I hope this helps. Let me know if you have any further questions.

Customer: replied 3 years ago.

Thank you for your reply.


 


I rate it as good

Expert:  TonyTax replied 3 years ago.
Thanks.

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