CEN-TA Cross Border Services - Tax, Visas, Immigration: tax on property UK = England

QUESTION: MY SON IS A CANADIAN RESIDENT AND HAS SOLD SOME RENTED FLATS THAT HE HAS OWNED FOR 10 YEARS IN THE UK,HE HAS BEEN A CANADIAN CITIZEN FOR SIX YEARS.WILL HE HAVE TO PAY CAPITAL GAINS TAX ON HIS PROPERTY SALE IN THE UK OR CANADA.IF HE HAS TO PAY IN CANADA AT WHAT PERCENTAGE RATE WILL HE BE CHARGED

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david ingram replies:

Any capital gain is taxable in Canada from the day he became a Canadian resident, not from the day he became a citizen.

So, if he paid $500,000 for them and they were worth $600,000 the day he came to Canada, and he sold them for $1,000,000 today, his UK capital gain would be $500,000 and his Canadian capital gain would be $400,000.

Canada taxes 1/2 of a capital gain so he would owe tax on $200,000. Every province has different tax rates so the following is just approximate. BC, for instance has 6 progressive rates starting at about 22% on the first $35,000 and topping at about 43% over $130,000

Because the six rentals were not his residence before he left, they will be taxable in the UK first.

He will get credit in Canada on line 431 Schedule 1 of his Canadian return for the tax paid to the UK.

The following might help as well
______________________________

My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions
Subject:        UK Capital Gains tax on UK Property Sale
Expert:         taxman@centa.com
Date:           Friday March 02, 2007
Time:           09:31 AM -0500

QUESTION:

Hi - I am a British citizen who has been resident in the US for 11 years, and a green card holder for 8 years. I have a property in the UK which I am considering selling. I have rented it out since I left, and have been paying tax in the US on the rental proceeds. I gather that I will have to pay capital gains tax in the US if I sell it. Will the UK Inland Revenue also expect me to pay capital gains tax on the sale? (It would seem a little unfair to have to pay twice!)
Thanks for your help.

___________________________________________
david ingram replies:

The property is taxable in the US and may be taxable in the UK first. If it is, the tax will be credited to you US tax by filing form 1116. This reply to a Canadian will give you a heads up.

--------------------------------------------

My_question_is: Canadian-specific
Subject:        Tax on property sale in UK
Expert:         taxman@centa.com
Date:           Wednesday January 24, 2007
Time:           10:25 AM -0500

QUESTION:

I hold both Canadian and British citizenship. I own property in the UK (I
have owned an apartment for about 15 years)and was wondering about the tax
situation, both in the UK and Canada, if I were to sell the property there.
-------------------------------
david ingram replies:

The UK is similar to Canada in terms of selling a principal residence.

I can also claim a British Passport but at 64 I am not likely to do so at
this time.

I know that if (always a non-resident) I had bought the house as an
investment, I would not owe any tax to the UK but would to Canada.

In the case of a house that you used to live in, it can be subject to UK
private residence tax relief if you lived in it before you left and can not
return because of job circumstances for either spouse.

If it is just an investment property, it is likely taxable. It does not
matter much though because the tax will be lower than the Canadian tax and
it "IS" taxable in Canada - the tax paid to the UK will be a tax credit in
Canada on lines 431 and 433 of the Canadian T1.

I suggest that you need to talk to a UK accountant or maybe the Inland
Revenue itself.

You can also find out a bit by reading

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRental
Income/DG_4020890

Do me a favour and let me know the answer if you find out.

This will be going out to another 13,000 people and someone may write back
with the answer. If so i will forward it to you.
--------------

David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)

email to taxman@centa.com <mailto:taxman@centa.com>
www.centa.com <http://www.centa.com/> www.david-ingram.com
<http://www.david-ingram.com/>

Disclaimer: This question has been answered without detailed information or
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this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
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david ingram wrote:

---------------------------------------------------------------------------------------------------------------

David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office)

email to taxman@centa.com
www.centa.com www.david-ingram.com

Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."

Be ALERT, the world needs more "lerts"

David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.

Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.

This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.

$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.

$1,000 would be the same with one rental

$1,200 would be the same with one business no rental

$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.

$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits no move in or out

$1,600 would be for two people with income from two countries

$2,800 would be all of the above and you moved in and out of the country.

This is just a guideline for US / Canadian returns

We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.

With a Rental for $350

A Business for $350 - Rental and business likely $450

And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.

Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.

TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.

8891 forms are generally $50.00 to $100.00 each.

18 RRSPs would be $900.00 - (maybe amalgamate a couple)

Capital gains *sales) are likely $50.00 for the first and $20.00 each after that.

Just a guideline not etched in stone.

This from "ask an income trusts tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention

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tax on property UK = England - Great Britain -