Business & Finance1 min ago
Capital Gains question
5 Answers
Dear all
Please could someone help me with the following? My mother, who is english, currently lives in Portugal and owns a property there. She is selling up to come back to the UK but wants to know, when she makes the sale, will she be liable to pay any capital gains tax on the property - and if so, whom to? Does anyone have any ideas on this, or websites that I could look at?
Any help greatly appreciated! Thanks.
Answers
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If the property is sold at a profit, the gain will be liable to capital gains tax
(CGT) in the UK. Any rent will also be liable to UK income tax but you will be
able to set a proportion of the expenses against it, such as the interest on any
loan taken out to purchase or improve the property, costs of maintenance,
utilities and repairs, agents� fees etc. The amount to be paid must be agreed
with your local Inspector of Taxes (the address will be in your telephone book) and after agreement you will receive a bill from the Collector of Taxes which will include payment details. At your local Tax Office you will find various leaflets containing helpful information on CGT, and it is also possible to discuss the matter in principle and in confidence with an officer. However, for the uninitiated the detail and forms can become very confusing, and once you start looking into it with the Inspector of Taxes you may find that employing a Chartered Accountant to handle it all for you will be well worth the money.
(CGT) in the UK. Any rent will also be liable to UK income tax but you will be
able to set a proportion of the expenses against it, such as the interest on any
loan taken out to purchase or improve the property, costs of maintenance,
utilities and repairs, agents� fees etc. The amount to be paid must be agreed
with your local Inspector of Taxes (the address will be in your telephone book) and after agreement you will receive a bill from the Collector of Taxes which will include payment details. At your local Tax Office you will find various leaflets containing helpful information on CGT, and it is also possible to discuss the matter in principle and in confidence with an officer. However, for the uninitiated the detail and forms can become very confusing, and once you start looking into it with the Inspector of Taxes you may find that employing a Chartered Accountant to handle it all for you will be well worth the money.
The main point to consider is her residence status at the time of the sale - if not resident/ not ordinarily resident, there will be no liability in the UK.
The rules on residence changed recently, but if she moved out of the UK before April 2013, Example 1 in the attached link applies - basically if she has been NR/NOR for 5 full tax years, she's OK.
I can't comment on the position in Portugal.
https:/
The rules on residence changed recently, but if she moved out of the UK before April 2013, Example 1 in the attached link applies - basically if she has been NR/NOR for 5 full tax years, she's OK.
I can't comment on the position in Portugal.
https:/
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