best way to sell a foreign appt, tax wise.

L

LauraG

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Hi, I am selling an apartment in Turkey and have a few general questions that may apply to all foreign buying and selling. I bought the apartment for 50K and put 5K contents into it. I hope to sell for 90K. In turkey, for some strange reason the buying and selling prices are kept low and on my tapu (deeds) it says I bought for about 23K. Apparently the same happens when I sell. (say it will say 35K) Does anyone have any experience of this? So what do I pay CGT on? The profit according to the deeds? Or the actual money that left the country and the money that came back in? (I didn’t pay the whole 55K to Turkey, only about 40K and the rest in stages to an Irish bank account)

Also, double tax agreements. I heard them talking that one was coming some time back, but am not sure if this has happened yet. Anyone enlighten me if this happened? Does this agreement, if in place, mean that if I pay 4% CGT in Turkey, then I pay 4% less in Ireland, i.e. 16%? If no agreement exists, do I pay 4% in Turkey and 20% here, again, based on which purchase and sale prices?

Finally, If I get a buyer in Ireland, a friend is interested say, and he pays the money directly to me upon signing over the deeds, what happens then? No money coming back into the country from Turkey, yet 90K suddenly paid into my bank account yet the tapu sale price says 33K?
I don’t want to get screwed for tax, so what’s the best way of going about this sale?

Many thanks in advance,

Laura G
 
LauraG said:
In turkey, for some strange reason the buying and selling prices are kept low and on my tapu (deeds) it says I bought for about 23K.
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Sounds dodgy. Did you ever get advice on why this is so from somebody with expertise in how the Turkish tax/conveyancing system works? Did you ask the solicitor who did the conveyancing?
I don’t want to get screwed for tax, so what’s the best way of going about this sale?
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Get independent, professional advice from somebody with expertise in how the Irish and Turkish tax systems work.
 
The strange reason is to reduce CGT for the vendor and is completely fraudulent. Something similar is rife in Spain but is bound to be tightened up soon. Have experience of spanish market but not Turkish. For what it is worth I used BlevinsFranks tax consultants that are based in London recently for ongoing tax advice. www.blevinsfranks.com
Must say I was very happy with their service.
Not cheap........£1000 for hour or so teleconference consult followed by 50-60 page report and couple of books etc but this was definitely best advice and will save me considerable monies in the future.
Not sure whether they cover Turkey.
 
whatever chance of 35k selling price might work in Turkey it will not wash with revenue.ie!
I would expect 90 minus 23 @20% unless you have some written documentation from Turkish solicitor to confirm deeds are "incorrect".
If you say to irish revenue that there was more than 23k paid for appt they will assume a fraudulent under the counter payment of 27k is involved in the transaction. Then you are getting into audit terriotory I fear unless you can map a clear above board paper trail.
I am not an accountant but be careful and get best advice.
 
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