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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I'm selling a house abroad and plan to buy a second home in

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I'm selling a house abroad and plan to buy a second home in the uk. Will I have to pay capital gains tax on the property I'm selling abroad? How much? What if I am already being taxed in the country where the sale takes place?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.If you are a UK resident and wish to sell your property abroad, under UK rules you would be taxed on your worldwide income and gains.Having said that, you would claim foreign tax credit relief against any tax suffered in the country of sale under double taxation agreement.More information on this is covered on Page 45 of RDR1 herehttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464664/RDR1_FB15_updates_RB_and_CGT.pdf I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Expert:  taxadvisor.uk replied 1 year ago.
Your CGT rate would be at 18%, 28% or a combination of both depending on your taxable income in the year of sale including the gain (gain is gain less gains annual allowance - currently £11,100).I hope this is helpful.
Customer: replied 1 year ago.
Would I be taxed for the whole sale price or just for the profit I made on it?
What are the tax rates if my annual income is £23000?
What does the double taxation mean? Can I only pay in the country where the property is?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.
You would pay capital gains tax on the gain you made and not on the sale proceeds.
Under double taxation agreement, you are not taxed on income/gain from the same source twice.
You would normally pay your taxes to the tax authorities where you are resident for tax purposes and claim foreign tax credit relief against any tax paid in the country of sale.
Lets say your capital gain was £50,100 before gains annual allowance of £11,100 making chargeable gain (50,100-11,100) £39,000.
Your annual income is £23,000 before personal allowance of £10,000 making income chargeable to income tax (23,000-10,000) £13,000.
Your total taxable income to work out what rate of CGT is payable becomes (39,000+13,000)£52,000.
First (31,865-13,000)£18,865 of the capital gain would be taxed at 18% and the remainder (39,000-18,865)£20,135 would be taxed at 28% making total CGT £9,033.50.
Say you had paid CGT of £6,500 in the country of sale. Then you would owes to UK tax authorities (9,033.50-6,500)£2,533.50.
I hope this is helpful and answers your question.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4883
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.
Best wishes

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