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TaxRobin
TaxRobin, Tax Consultant
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Experience:  International tax
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I an Austrian national and have been living and working in

Resolved Question:

I an Austrian national and have been living and working in UK since 1969. I retired 3 years ago. I have a property in Austria that I would like to sell and expect to get around € 160k.
An Austrian tax of 3.5% will be paid locally.
Can you please tell me what are my tax liabilities in UK?
Many thanks
Sigrid Ziviani
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
and thank you me to assist you.
Even though this property is not in the UK you will be required to pay capital gains tax on the difference in your sale and the cost. You would be allowed your allowances of course.
The UK Austria tax treaty does have relief from double taxation.
The treaty Article 6 which covers Income From Immovable Property does allow the following:
(1) Income from immovable property may be taxed in the Contracting
State in which such property is situated.
And under Article 13, Capital Gains
(1) Capital gains from the alienation of immovable property, as
defined in paragraph (2) of Article 6, may be taxed in the Contracting
State in which such property is situated.
The above gives the right to Austria to tax on the property.
The relief comes in the form of a credit taxes paid to Austria.
Article 24
Elimination of Double Taxation
(1) Subject to the provisions of the law of the United Kingdom
regarding the allowance as a credit against United Kingdom tax of tax
payable in a territory outside the United Kingdom (which shall not affect the general principle hereof) Austrian tax payable under the laws of Austria and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Austria (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which Austrian tax is computed.
Customer: replied 2 years ago.

Many thanks prompt reply. If I understood right after paying

3.5% Austrian tax ( €5600) the balance of € 144600 that I intend to transfer to my bank in UK will be subjected to UK tax. Could you tell me what the percentage of this tax will be?

Expert:  TaxRobin replied 2 years ago.
,
Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
It’s the gain you make that’s taxed, not the amount of money you receive.
You’ll pay 28% tax on your gains if you’re a higher or additional rate taxpayer.
You’ll either pay 18% or 28% tax on your gains if you’re a basic rate taxpayer. How much you pay depends on the size of your gain and taxable income.
You need to pay Capital Gains Tax if your total taxable gains are above your annual Capital Gains Tax allowance.
You will need to report a self assessment.
TaxRobin and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

I am a basic tax payer. My annual GROSS income before deduction of personal allowance is 12.5k p.a. The house I am selling was put in my name by my parents in Austria 8 years ago. Assuming that the net income after expenses and Austrian Tax is € 140k, which rate of tax would I pay, 18% or 28%?

Expert:  TaxRobin replied 2 years ago.
Yes you would be in the 18%. You will receive the credit taxes paid in Austria.
Customer: replied 2 years ago.

Many thanks

Expert:  TaxRobin replied 2 years ago.
You are most welcome.

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