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bigduckontax, Accountant
Category: Tax
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Taxation between Russia and UK. I am selling a flat in

Customer Question

taxation between Russia and UK. I am selling a flat in Russia and need to know how the double taxation works
Assistant: Thank you. Can you provide any more details to help us find you the right Expert?
Customer: OK. I own shares in a flat in Russia and the other owners want to buy me out. We agreed on £18,000 for my share. They just discovered that Russia charges 30% tax on sales to foreigners. If I don't pay tax in Russia, and I pay tax in UK, how much would I pay on it in UK?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You are liable to taxation in both countries on the gain made on disposal; Profits Tax (PT) in Russia and Capital Gains Tax (CGT) in the UK. However, there is a Double Taxation Treaty between the two countries which precludes the same stream being taxed in both jurisdictions. This is achieved by means of tax credits, the tax paid in one being allowed as a tax credit against the liability in the other. The Treaty does not, however, protect you from differences in rates of taxation. From the data you are quoting, as the maximum UK CGT is at 28% and you have an Annual Exempt Amount (AEA) of 11.3K to offset this, then your UK liability would appear to be nil as any liability would be absorbed by the Russian PT at 30%.

I do hope that you have found my reply of assistance.

Expert:  bigduckontax replied 1 year ago.

We have sorted this out elsewhere. You should ask Just Answer Administration for a refund of your fee for this question.