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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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My wife and I who live in England are in the process of

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My wife and I who live in England are in the process of selling our rental property in Germany of 14 flats which we’ve had for the last 10 years. The property is looked after by our son who is our Power of Attorney and lives in Germany.
All our taxes are paid annually in Germany and our accountant in England supplies the figures to the HMRC.
After the sale goes through my son will share a third of the proceeds.
So my question is: Would there be any Capital Gains Tax to pay in Germany and again in England when our share is transferred over to us.
JA: What are the assets or property for this capital gain?
Customer: There will be about £300,000 profit
JA: Anything else you want the Accountant to know before I connect you?
Customer: Not for now thanks

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

As UK residents for tax purposes you are taxed on your worldwide income and gains.

If you have to pay a capital gains tax in Germany on the gain from sale of flats, you would be able to calim foreign tax credit relief on UK tax against tax already suffered in Germany.

You complete supplementary pages SA106 - Foreign to claim foreign tax credit relief and SA108 to report capital gain.

My aim is to give you a professional service. I hope this is helpful and answers your question.

If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Customer: replied 17 days ago.
If there is no capital gains tax to pay in Germany as we've had the property for over ten years and believe you would be exempt from CGT. Would we have to pay any in England?

Thank you for your reply.

In the UK, the system is different.

This is a rental property and the period held is irrelevant. You get relief for period the property is lived in as main residence.

Your gain will be taxed in the UK. If ot is jointly owned then each owner would pay CGR on their share of the gain and claim gains allowance of £12,300 per UK based owner.

I hope this is helpful and answers your question.

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