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bigduckontax
bigduckontax, Accountant
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I am a german citizen, resident in London since 2016, non

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Hello,I am a german citizen, resident in London since 2016, non domiciled and taxed on the remittance base since 2016. Before 2016 there was no link to the UK, I only had a property in London/Soho as holiday home that I bought in 2012.In 2010 (before my arrival in UK) I bought a property in Berlin with a mortgage from a bank in Germany.
It is now time to remortgage this Berlin property with another bank in Germany, and they will pay out a higher amount because of the value increased.
Could I use these funds from Germany and remit them into UK and repay any of my UK Mortgage on a properties that I own in UK?My question is if these particular funds would be subject to remittance tax because I remit it into UK. And if yes, would there be any difference if I repay any UK mortgage or use the money for living expenses or renovations on UK properties?Kind Regards,
Eric Babak

You can,no problem.

Customer: replied 16 days ago.
thank you for your quick reply, could you please get me a some background information why the remittance tax does not apply here?
Customer: replied 16 days ago.
this article scared me: https://www.withersworldwide.com/en-gb/insight/new-tax-rules-for-loans-taken-out-by-uk-resident-non-domiciliaries

Have a look at the second paragraph of the item labelled 'What should I do now.

I think you will find that it covers your position.'

Customer: replied 16 days ago.
the article is a bit dated, so lets forget it. so could you please help me to understand why the remittance tax does not apply in my case? thanks
Customer: replied 16 days ago.
my accountant wasn't sure unfortunately

Well, having read the paragraph it is pretty clear that your activities do not breach the remittance rules.

Customer: replied 15 days ago.
could you share this paragraph with me please

It's the 'For existing loans' which is the key, have a good read.

Customer: replied 15 days ago.
your point is I can remit them the funds to UK, because I did own the property in Germany before I got resident in UK?

indeed.

Customer: replied 15 days ago.
ok, but I guess if I would sell the property in Berlin a few years after I brought the money from a Mortgage into UK, will this then be subject to tax in UK?

Yes, because you are remitting it.

Customer: replied 15 days ago.
but just bringing the money from the loan from the berlin property will not trigger the remittance because it is still mortgage and not a realised capital, correct? then when selling berlin the money that was remitted will be subject to remittance tax. I think I got it now, so this means I better keep there berlin property

That is entirely up to you.

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