CGT in the UK - Property sale

If you are an Irish resident and sell a property in the UK are you liable to CGT in the UK? I read recently that the double taxation agreement comes into to play so that you can opt to pay the CGT in Ireland instead, is that true?

You'd need to read the relevant double taxation agreement which is available from the Revenue website, maybe read the relevant info on the UK Inland Revenue site and perhaps get independent, professional advice on this matter.

I contacted the Inland Revenue site in the UK. I will not be liable to CGT in the UK on selling UK property because:

- I am not a resident of the UK and have never been
- They do not consider me buying a property in the UK and letting it out a trade or profession. If I buy a property and run it as a B&B then that would be different but buying for an investment just to let out is fine.

Of course this ruling may change but at the moment this is what they tell me.

AFAIA you are liable to Irish CGT on worldwide investments. Your liability to CGT is to the Irish authorities with rules applying under Irish Law and you offset the liability paid in foreign country in this case as stated above Zero in UK.

Thats my understanding but stand corrected.

Yep, I would agree with you there. CGT is 40% in the UK and only 20% in Ireland so I don't mind paying the Irish one!

doberden said:

Yep, I would agree with you there. CGT is 40% in the UK and only 20% in Ireland so I don't mind paying the Irish one!

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I don't understand this as you don't have a liability in the UK anyway

I contacted the Inland Revenue site in the UK. I will not be liable to CGT in the UK on selling UK property because:

- I am not a resident of the UK and have never been
- They do not consider me buying a property in the UK and letting it out a trade or profession. If I buy a property and run it as a B&B then that would be different but buying for an investment just to let out is fine.

Of course this ruling may change but at the moment this is what they tell me.

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If you have a liability in a foreign country my understanding of the situation is that the liability is calculated and paid in the foreign country and then calculated in Ireland and the difference remitted in Ireland with no refund due if the tax paid in the foreign country is greater than the tax due in Ireland.

Example
Calculated In Foreign Country
Gain 100,000
Tax paid @ say 30% 30,000

Calculated In Ireland
Gain 100,000
Tax @ 20% 20,000

Amount payable in Ireland is Zero
Total tax paid 30,000

Another example where balance of tax is paid in Ireland

Calculated In Foreign Country
Gain 100,000
Tax paid @ say 10% 10,000

Calculated In Ireland
Gain 100,000
Tax @ 20% 20,000

Amount payable in Ireland is 10,000 (20,000 less 10,000)
Total tax paid 20,000

(For the purposes of clarity and simplicity I have ignored indexation relief enhancement etc)

Hope this explains the tax situation. As I said this is my understanding and stand corrected.