Capital gains tax on property abroad

This is a discussion on Capital gains tax on property abroad within the The Foyer forums, part of the Off the Grid category; Hello all, Just wondering if their are an tax experts who could answer a question for me. If I have ...

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Old Oct 2, 2004, 5:18pm   #1
Joined May 2004
Capital gains tax on property abroad

Hello all,

Just wondering if their are an tax experts who could answer a question for me. If I have a house in England which I live in full time and a house in Ireland which I want to sell, would I have to pay capital gains tax in both England and Ireland or would it be just Ireland as long as I don't bring the money back to England.

Thanks,

Breadman
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Old Oct 2, 2004, 5:56pm   #2
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If an individual is a UK resident,ordinarily resident and domiciled he is liable to UK tax and CAPITAL GAINS TAX on his WORLDWIDE income and assets..Double taxation agreement means you won't pay twice.......hope that helps
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Old Oct 2, 2004, 8:22pm   #3
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Originally Posted by chump
If an individual is a UK resident,ordinarily resident and domiciled he is liable to UK tax and CAPITAL GAINS TAX on his WORLDWIDE income and assets..Double taxation agreement means you won't pay twice.......hope that helps
Hello Chump,

Where can I find out about the double taxation agreement between England & Rep of Ireland, I cannot find it on inland revenue site.

Thanks,

Breadman
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Old Oct 2, 2004, 10:12pm   #4
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Doesn't the UK necessarily have a double tax treaty with all other EU countries, enshrined in EU law? (I'm not 100% certain - I've always just assumed it ... never the safest of things to do!).
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Old Oct 3, 2004, 8:31pm   #5
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here you go

http://www.revenue.ie/services/tax_info/dtas/uk.htm
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Old Oct 3, 2004, 8:50pm   #6
 
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I recently heard a tale of someone who was faced with a similar situation as breadman, he moved to a low tax paying country for a year ( I don't know where) he was the deemed domiciled in that particular country, he then sold his assets and was able to return to the uk, I CAN'T confirm this 110%, but it certainly sounds good,
Please DYOR, or pay someone who doe's know, the cost incurred may be small in comparison to having the Inland Revenue investigating you,and being faced with an unknown tax bill
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Old Oct 3, 2004, 10:34pm   #7
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Originally Posted by chump
thanks chump,

any chance you could explain this to me in english, section (1) does this mean that Rep of Ireland will tax me as a house is immovable property or do I have a choice which country I pay the tax in.

Breadman

ARTICLE 14 CAPITAL GAINS

(1) Gains derived by a resident of a Contracting State from the alienation of immovable property situated in the other Contracting State may be taxed in that other State.

(2) Gains derived by a resident of a Contracting State from the alienation of:

(a) shares, other than shares in which there is substantial and regular trading on a Stock Exchange, deriving their value or the greater part of their value directly or indirectly from immovable property situated in the other Contracting State, or

(b) an interest in a partnership or trust the assets of which consist principally of immovable property situated in the other Contracting State, or of shares referred to in sub-paragraph (a) of this paragraph,

may be taxed in that other State.

(3) Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.

(4) Except as provided in paragraph (2) of this Article and notwithstanding the provisions of paragraph (3) of this Article, gains derived by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that Contracting State.

(5) Gains from the alienation of any property other than that referred to in paragraphs (1), (2), (3) and (4) of this Article shall be taxable only in the Contracting State of which the alienator is a resident. Provided that where under the law of that Contracting State an individual, in respect of such gains, is subject to tax thereon by reference only to the amount thereof which is received in that Contracting State, the foregoing provisions of this paragraph shall not operate in relation to so much of such gains as is not received in that Contracting State.

(6) The provisions of paragraph (5) of this Article shall not affect the right of a Contracting State to levy according to its law a tax on gains from the alienation of any property derived by an individual who is a resident of the other Contracting State and has been a resident of the first-mentioned Contracting State at any time during the three years immediately preceding the alienation of the property.

(7) For the purposes of this Article the term "immovable property" means immovable property as defined in paragraph (2) of Article 7 of this Convention.]1

Amendments

1 Substituted by SI No 494 of 1998 Art IV with effect:

For Income tax – from 6 April 1999

For Corporation tax – from 1 January 1999
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