Cyprus-Forum.com

[BerkshireScouse]

Hi

I am a UK citizen who has been a resident in Cyprus since 2004. I own a property in the UK which I have been letting out since 2001.

I am now giving serious consideration to selling this property before the recently announced changes to capital gains tax take effect from next April. I understand that any property sold by any non-UK resident is currently free from CGT, provided that that person remains non-resident in the UK for 5 complete and consecutive UK tax years. However, I gather that the HMRC definition of a ‘non-UK resident’ is far from clear cut.

Given my circumstances, would anyone be able to advise me regarding the following points:
1. Would I be classed as a ‘non-UK resident’ for the purposes of CGT?
2. Am I right in thinking that the ‘5 complete and consecutive UK tax years’ condition applies to the period after the sale of the property?
3. Would I be subject to CGT were I to sell the property before April 2015 anyway?
4. Are there any useful sources of information on the Net from where I can obtain definitive, unambiguous, clear confirmation of my position?

Thank you very much in anticipation of your assistance.

[B25]

My limited understanding on this is that there is no CGT on your only residence.

If you had a second property then that would be subject to CGT.

Hth

[Pyrpolizer]

I cannot really help you but imo the first thing you should CHECK is whether selling your house falls within what is defined as CGT.
Suppose you bought that house last year and you paid 500,000 for it. Selling it this year at the same price can hardly be considered as CG as far as Cypriot law is concerned. Why would be any different in the UK?

[GreekIslandGirl]

They do like to keep things as "Grey Areas" - making the rules up as they go along.

Anyway, I'm not sure what they would decide as to your residencey, but if you have been resident somewhere else for over 5 clear years, then they should honour that. So basically, you should fall into the "no CGT" bracket on that basis - until they bring it in for everyone next year. But from what I undertstand, you won't suddenly be due to pay CGT going back to when you bought the property. I think it will start from its value at next year's prices onward. Check that.

If you sell in the next few months, you may well be selling at a time when many others might be doing the same so that might not be the best time to get a good price. Even paying the CGT a few years down the line, if you wait, might earn you more money anyway - it's all a gamble.

There is an important factor to remember though - if you sell now, then won't you be liable to pay CGT in Cyprus? You would have to pay that, as far as I'm aware.

Presumably it's not your only home?

So, if you wait and sell later you might get more anyway - and if you had to pay CGT in the UK, well, you would then use the double taxation agreement and not pay here in Cyprus (or vice versa).

[erolz66]

I am now giving serious consideration to selling this property before the recently announced changes to capital gains tax take effect from next April.

My understanding is that these are still 'proposals'. Any final legislation may be substantially different from these proposals as they currently stand.

It is also my understanding that the proposed changes apply to non UK residents being liable for CGT on assets they sell IN THE UK. I do not think they propose changes to the situation when you sell an asset NOT in the UK ?

I am no expert but I suspect your liabilities for capital gains on selling an asset in Cyprus will be those under RoC law and I am not sure you have any liability for UK CGT on an asset sold outside the UK at all ?

Are there any useful sources of information on the Net from where I can obtain definitive, unambiguous, clear confirmation of my position?

I would try this (pdf) http://www.berkeley-hurrell.com/downloa ... l-2014.pdf

Re if you are UK tax resident or not (though I do not think it matters in your case, I think if you are RoC tax resident is probably what matters) I would look at the pdf guide here

http://search2.hmrc.gov.uk/kb5/hmrc/for ... ormId=7361

[erolz66]

I think it will start from its value at next year's prices onward. Check that.

If the proposals get passed into legislation in their current form then you are right. CGT liability for non UK tax residents selling assets IN the UK would be calculated from this date and not applied to gains retroactively of the new legislation. However I am not sure the original poster is liable for UK CGT tax at all on a sale of an asset in the RoC ? Only RoC CGT.

[GreekIslandGirl]

I think it will start from its value at next year's prices onward. Check that.

If the proposals get passed into legislation in their current form then you are right. CGT liability for non UK tax residents selling assets IN the UK would be calculated from this date and not applied to gains retroactively of the new legislation. However I am not sure the original poster is liable for UK CGT tax at all on a sale of an asset in the RoC ? Only RoC CGT.

His asset is in the UK:

I own a property in the UK which I have been letting out since 2001.

[erolz66]

I own a property in the UK which I have been letting out since 2001.

Doh ! My bad.