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capital gains tax for the non resident
capital gains tax for the non resident
could anyone give some opinion or advice as to the position re the payment of portuguese capital gains tax for property sold here in portugal but where the sale proceeds are paid between seller and buyer within the uk...how is portuguese cgt levied and charged in such a case?
does the lawyer here ask for a retention tax fund...or how does it all work????
does the lawyer here ask for a retention tax fund...or how does it all work????
CGT
Hi Martin.
Where funds are paid is not really an issue. The tax man will get a copy of the sale deed from the Notary and from that work out the cgt payable. If this is not offered by the non resident on the appropriate tax return then he/she will be chased.
The attorney that signed the deed would probably be the one to answer initially for any unpaid tax if the actual seller doesn't settle up. In addition the nominated fiscal representative (required by law for all non residents) would also be asked by the tax man to provide answers as to any unpaid taxes.
An efficient lawyer would retain the appropriate funds especially if he/she is signin as attorney for the seller!
Where funds are paid is not really an issue. The tax man will get a copy of the sale deed from the Notary and from that work out the cgt payable. If this is not offered by the non resident on the appropriate tax return then he/she will be chased.
The attorney that signed the deed would probably be the one to answer initially for any unpaid tax if the actual seller doesn't settle up. In addition the nominated fiscal representative (required by law for all non residents) would also be asked by the tax man to provide answers as to any unpaid taxes.
An efficient lawyer would retain the appropriate funds especially if he/she is signin as attorney for the seller!
CGT avoidance
With ever incresaing exchange of information made very easy by electronic data storage I wouldn't want to take the chance on skipping the country to avoid the tax due particularly to a tax treaty partner of Portugal.
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nightrider
Re: CGT avoidance
Hi Biffa,biffa wrote:With ever incresaing exchange of information made very easy by electronic data storage I wouldn't want to take the chance on skipping the country to avoid the tax due particularly to a tax treaty partner of Portugal.
Agreed, and was most definately not what I was implying, but sometimes said professionals are responsible, one way or another and utterly disgracefully, without their clients awareness, until much later and/or when they go to sell their properties. More often than not when these very distressful situations arise for the owners/sellers, there always seems to have been a connection of recommended by a Real Estate Agent and/or a builder involved on their original purchase.
Nightrider
Last edited by nightrider on Sat Nov 19, 2005 12:30 am, edited 1 time in total.
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Guest
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nightrider
Hi Guest,Anonymous wrote:has anyone heard when the rollover relief granted for cgt will apply anywhere within the e.u will take effect?
This is a very very good question....and we too have also been looking into this as have others. I.e. if there is a double taxation treaty, in theory you should be able to sell your residence here and roll it over in the Uk or another country in the E.U. Otherwise it would appear somewhat one sided!!!
Nightrider
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Guest2
http://www.hmrc.gov.uk/si/double.htm
The hmrc website contains a lot of info relating to taxation and is worth a look. Remember that a DT agreement should mean that you dont pay tax twice but not that you can choose which country to pay it in that is defined in the statutes
DT15662 - DT: Portugal: double taxation agreement, Article 13: Capital gains
(1) Gains from the alienation of immovable property, as defined in paragraph (2) of Article 6. may be taxed in the Contracting State in which such property is situated.
(2) Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professional services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State.
(3) Notwithstanding paragraph (2) of this Article, gains from the alienation of ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State of which the alienator is a resident.
(4) Gains from the alienation of any property other than those mentioned in paragraphs (1) and (2), shall be taxable only in the Contracting State of which the alienator is a resident.
The hmrc website contains a lot of info relating to taxation and is worth a look. Remember that a DT agreement should mean that you dont pay tax twice but not that you can choose which country to pay it in that is defined in the statutes
DT15662 - DT: Portugal: double taxation agreement, Article 13: Capital gains
(1) Gains from the alienation of immovable property, as defined in paragraph (2) of Article 6. may be taxed in the Contracting State in which such property is situated.
(2) Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professional services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State.
(3) Notwithstanding paragraph (2) of this Article, gains from the alienation of ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State of which the alienator is a resident.
(4) Gains from the alienation of any property other than those mentioned in paragraphs (1) and (2), shall be taxable only in the Contracting State of which the alienator is a resident.