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Sam
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HI Sam, I have an overseas property in Switzerland. It is

Resolved Question:

HI Sam,

I have an overseas property in Switzerland. It is a second residence. I am resident in UK and pay tax here at the higher rate.
I am thinking of selling next year.

After FX adjustments, I guess I might make a gain of approx £100k gross.
I assume this means a UK CGT tax liability of around £28k?

However, I am also liability for Swiss capital gains taxes and estate agents fees whichbetween them might total 50k CHF ie about £35k.

Can I offset these, meaning there will be effectively no UK CGT laibility?

Thanks

Ray Powell
Submitted: 1 year ago.
Category: UK Tax
Expert:  Sam replied 1 year ago.

Hi Ray

 

Thanks for your question and asking for me

 

Yes you can offset the Swiss capital gains tax suffered as we have a double taxation treaty between us and Switzerland. And yes this would mean you have no UK capital gain liability as the Swiss capital gains suffered is greater than that in the UK.

 

Thanks


Sam

Customer: replied 1 year ago.


Thanks Sam,


 


Can I just clarify - the Swiss capital gains tax is less than the UK, but if I also add in estate agents fees etc.....the overall cost to me is higher than the UK CGT. I assume your answer still applies ie Swiss tax liability can be added to allowable costs so no UK tax liability remains?


 


Rgds

Expert:  Sam replied 1 year ago.

Hi Ray

 

Thanks for your response

 

If the Swiss capital gains tax is less, then yes you will on the initial gain have a remaining liability in the UK.

 

But from the initial gain (so sale price less purchase price) you can deduct

1) The costs to purchase - such as legal fees

2) The costs of any major improvements to the property

3) The costs to sell - such as legal fees

4) And have any tax reliefs considered, for example had this ever been your main residence in which private residence relief would be due on part of the gain, and had this not only been your main residence but also let out (and rental income declared to HMRC) then private lettings relief.


Then the first £10,600 is capital gain free, as this is the annual exemption allowance, and finally any gain remaining is liable to 28% capital gains tax.

Then you would claim the Swiss capital gains tax suffered, and only then, should there be a remaining liability then this is what you would pay to HMRC for the UK capital gain tax position.

 

Thanks

 

Sam

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12930
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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