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bigduckontax, Accountant
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I am an Irish citizen carrying enormous capital losses forward

Customer Question

I am an Irish citizen carrying enormous capital losses forward from Irish & other Foreign investments.
I'm currently selling a flat in the UK which triggers a capital gains liability but with the Double Taxation Treaty I need to know the following please:
1. TO whom is any CGT payable & at what rate ?
2. Can I use my significant losses against any potential gain from the sale of this property in the UK ?
3. If I sell other properties within a tax year, is the order of sale important in terms of CGT liability or is it just assessed as a total at the end of that tax year ?
Thank you!
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you confirm whether you are a UK or Eire resident for tax purposes please?
Customer: replied 2 years ago.

Irish resident, thanks.

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.
Hi again.

I'm going to opt out of this question to allow another expert to answer it as I'm having internet connection problems and I cannot access the information I need for my answer. My apologies.
Expert:  bigduckontax replied 2 years ago.

Hello, I'm Keith and happy to help you with your question. Please advise where you are resident? Sorry, I see you have already Tony Tax that information. Please give me a few moments to frame my answer.

Expert:  bigduckontax replied 2 years ago.
Although the property in question is a UK property as an Irish citizen you are assessed for tax in Ireland. Should the UK tax authorities assess you the payment made would be allowable as a tax credit against any Irish tax in accordance with the Double Taxation Treaty between the two countries.

The Irish Government have posted the following information:

'The relief from Capital Gains Tax (CGT) (for the first 7 years of ownership) for properties purchased between 7 December 2011 and 31 December 2013 was extended by one year to include properties bought to the end of 2014. Where property purchased in this period is held for seven years the gains accrued in that period will not attract CGT.'

So the first test is when was the UK property bought?

If your purchase date falls outside the limit above then CGT is liable on the gain at a rate of 30%. You must submit a tax return on all disposals. You must usually file a return on or before 31 October in the year following the tax year in which you disposed of the asset on a Form 11 (pdf).

Allowable losses are set against the chargeable gains of the same year and if the losses exceed the gains, the excess may be carried forward against gains of later years.

If you have any doubts you should contact the Revenue Commissioners.
Customer: replied 2 years ago.

The UK property was purchased in either 2005 or 2006.


 


Is any CGT payable to the UK authorities or is it payable to the Revenue Commissioners where I have significant losses carried forwards that can be offset ?


 


My concern is that I will have to pay the UK authorities & not be able to use my losses carried over with the Revenue Commisioners as these were not created in the UK but from Irish & other Foreign assets.

Expert:  bigduckontax replied 2 years ago.
Right, so the extended Irish Government concession does not apply.

As you are an Irish Citizen resident in Ireland then your disposal of UK property should not give rise to UK GCT so you will only be concerned with the Irish taxation position. I do see where you are coming from should the scenario regarding tax credits from the UK being useless in your large loss situation, indeed it crossed my mind as I was answering your question.

In the unlikely event of HMRC trying to impose UK CGT I would be inclined to adopt a strong line that they are not in a position to tax the gain anyway in the light of your residence and domicile.
Customer: replied 2 years ago.

Thanks.


 


Your answer is exactly what I wanted to hear....


 


I just must make sure this happens now!

Expert:  bigduckontax replied 2 years ago.
Delighted to be of assistance.

Please be so kind as to rate me before you leave the Just Answer site.
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Category: Tax
Satisfied Customers: 3114
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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