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TheLawLDN
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I have a question about uk tax when selling a property

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Hi! I have a question about uk tax when selling a property abroad
JA: Has anything been filed or reported?
Customer: not yet
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No I don’t think so

Hello, I'm an adviser with JA and I will try to help you.

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Hello, can you clarify where this property is located (country)?

Can you also clarify if you are a UK tax resident and if you pay tax only on UK originated income.

Please leave your reply here and I will revert to you later.

Customer: replied 12 days ago.
I am Norwegian but I live in the UK, and is domiciled in the UK. I might be gifted a property in Norway. There is an agreement made with a developer to build flats on this property. The sale to the developer takes place next year. My question is am I eligible to pay UK tax on this sale? Is it just capital gain tax I would have to pay? So say that I am gifted this property worth a certain amount. If I sell this property to developer for the same amount - do I need to pay tax on this..?
Customer: replied 12 days ago.
I currently don’t have any properties or income outside UK. Except from this property that I might be gifted.

These circumstances are very specific, and this service is not meant for legal advice.

You should speak with your accountant, as your tax regime at the relevant time would be important to understand the best course of action.

This situation require a full assessment, that can be made only by someone who has the full picture.

The good thing is that Norway and the UK have a treaty against double taxation:

https://www.gov.uk/government/publications/norway-tax-treaties#:~:text=The%20Double%20Taxation%20Convention%20entered,Tax%20and%20Capital%20Gains%20Tax

On another note, as you are an expatriate, I think it is advisable that you ask your accountant about the Remittance Basis Charge (RBC), of which you might have also heard recently in the news.

The RBC is an alternative tax treatment that is available to individuals who are resident, but not domiciled, in the UK, and have foreign income and gains.

In very simple word, the "resident non-domiciled" regime allows a person who was born in another country, or whose parent is from another country (a country to which that person may envisage to return someday), to pay tax in the UK only on their UK income.

The remittance can be claimed annually and there is no minimum period over which it must apply.

However, the RBC can be claimed by individuals who are legally non-UK domiciled and who are not deemed UK domiciled for income and capital gains tax purposes.

An individual is deemed domicile in the UK if they were UK resident in at least 15 of the previous 20 tax years and UK resident in 2020 to 2021 tax year (‘long-term UK residence’), AND/OR they were a UK resident in 2020 to 2021 tax year, were born in the UK and have a UK domicile of origin (so called ‘formerly domiciled residents’).

If the remittance basis applies, incomes and gains from UK sources are taxable as they arise, while most types of foreign incomes and gains are only chargeable in the UK if they are brought into the UK (irrespective of the tax year in which the foreign income or gains were made).

If, instead, the remittance basis does not apply, then the arising basis applies, and worldwide incomes and gains are then taxable in the UK.

The remittance basis applies automatically (and there is no need to claim for it) if, in a given tax year a legally non-UK domiciled individual, who is also a UK resident:

1)Has less than £2,000 of non-remitted foreign incomes and gains in the tax year, whether or not they are deemed domicile in the UK domiciled (this meaning that individuals deemed UK domiciled are automatically taxable on the remittance basis if such a condition is met); AND/OR

2)Has not made any taxable remittances to the UK; has no UK gains and UK source incomes of at most £100 taxed investment income; is not deemed UK domiciled and either was UK resident in 6 or less of the previous 9 tax years, or is under 18 throughout the relevant tax year.

It is possible to opt out of the automatic remittance basis and to pay tax on the arising basis instead, when preferable based on certain circumstances.

The RBC is payable by individuals who both claim the remittance basis and who meet the minimum residency requirements.

The amount of the RBC to be paid depends on how long an individual has been a UK resident:

1)RBC is £30,000 if the individual has been a UK resident in 7 of the previous 9 tax years;

2)RBC is £60,000 if the individual was UK resident in 12 of the previous 14 tax years.

I hope this information is helpful and I wish you the best.

Please do not hesitate to contact JA again if you need help and you may ask to speak with me directly if you wish ("For TheLawLDN only").

I would appreciate it if you could provide a positive rating, if you wish so of course.

Thank you very much.

Regards.

Customer: replied 11 days ago.
This is very helpful. Thank you so much for your thorough reply. I will check this further. Many thanks!

Glad to hear that.

You are welcome.

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