dogbox Posted August 4, 2006 Share Posted August 4, 2006 Apparently there is no CGT liability in Morocco if you 'flip' a sales contract and take the profit. Furthermore A Dual Taxation Treaty exists between Morocco and the UK. Developer blurb implies this also means no liability when that profit is remitted to the UK A Chartered Accountant I know couldnt find anything out. Does anyone out there know whether there would be a liability in the UK? Quote Link to comment Share on other sites More sharing options...
The Soup Dragon Posted August 4, 2006 Share Posted August 4, 2006 Your property, though not built, is an investment. If you sell an investment and the gain after reasonable expenses is greater than the threshold permitted each year then CGT is due. I'm confident that if you contact your local tax office they will give a very similar answer. If selling before completion represented a loop whole in our taxation system it would have in all likelihood been addressed by now. Quote Link to comment Share on other sites More sharing options...
Goat Posted August 4, 2006 Share Posted August 4, 2006 (edited) As a UK domiciled person you are taxable on your worldwide gains provided you are resident in the UK. To be non-resident for CGT purposes you now need to live abroad for five complete tax years. (NB. Domicile is a tricky concept, basically it is the same as nationality). Edit: Further to Soup Dragon's point above, the CGT annual exemption for 2006/07 is £8,800. Second edit: Bit of background re the living abroad for five years bit. A fairly popular tax avoidance method was to move to Belgium for a year, make your capital gains in that year then come back to the UK. Because Belgium effectively had no CGT, your gains were tax free and because you were non-resident they were not subject to UK tax. It was effective so the rules were changed to five years. Edited August 4, 2006 by Young Goat Quote Link to comment Share on other sites More sharing options...
Radio Posted August 4, 2006 Share Posted August 4, 2006 There may not be a CGT liability in Morocco if you flip, but there certainly will be (assuming you make a profit) in UK, regardless of whether or not you remit the proceeds to UK. If you are UK resident for tax purposes you are required to declare all your income, wherever in the world that is earned. The I.R. will take into account any reciprocal tax arrangements with other countries when calculating your tax owed. Quote Link to comment Share on other sites More sharing options...
The Soup Dragon Posted August 4, 2006 Share Posted August 4, 2006 There are only two certainties in our lives. Tax and death. Have a good weekend. Quote Link to comment Share on other sites More sharing options...
dogbox Posted August 5, 2006 Author Share Posted August 5, 2006 Thanks everyone. You confirmed what I thought would be the case. 'Double Taxation Treaty' with another nation doesnt = no UK Tax liability Quote Link to comment Share on other sites More sharing options...
scotty Posted August 10, 2006 Share Posted August 10, 2006 An interesting issue came up talking to a friend, and I posted the question on a tax website. "Can you claim the interest paid on your main property mortgage, against a property that you are renting?" ie you buy the 2nd property cash, with no mortgage The answer seems to be yes, you can u to the value of the property (or at least what you could get a mortgage for it). So I presume that if you have invested a deposit on an off-plan development, borrowing the money from your mortgage, you can claim back the interest paid as a business expense. has anyone come across this one before? discuss....... Quote Link to comment Share on other sites More sharing options...
dogbox Posted August 10, 2006 Author Share Posted August 10, 2006 An interesting issue came up talking to a friend, and I posted the question on a tax website. "Can you claim the interest paid on your main property mortgage, against a property that you are renting?" ie you buy the 2nd property cash, with no mortgage The answer seems to be yes, you can u to the value of the property (or at least what you could get a mortgage for it). So I presume that if you have invested a deposit on an off-plan development, borrowing the money from your mortgage, you can claim back the interest paid as a business expense. has anyone come across this one before? discuss....... Yes this has always been my understanding. I keep careful records of interest paid to fund any such investing which I hope I will be able to offset against future gains. Quote Link to comment Share on other sites More sharing options...
mmv Posted August 30, 2006 Share Posted August 30, 2006 Apparently there is no CGT liability in Morocco if you 'flip' a sales contract and take the profit. Furthermore A Dual Taxation Treaty exists between Morocco and the UK. Developer blurb implies this also means no liability when that profit is remitted to the UK A Chartered Accountant I know couldnt find anything out. Does anyone out there know whether there would be a liability in the UK? There would be a tax charge in the UK if it is fliped and may even be taxed as trading income. Quote Link to comment Share on other sites More sharing options...
The Soup Dragon Posted August 30, 2006 Share Posted August 30, 2006 What if you hold onto property for a few years and rent it out before selling it on? I understand that you can offset interest against rental. I'm guessing you couldn't then use same interest payments to reduce your CGT. (Think that's what applies in France and therefore probably Morocco.) Quote Link to comment Share on other sites More sharing options...
Jetsetter Posted August 30, 2006 Share Posted August 30, 2006 What if you hold onto property for a few years and rent it out before selling it on? I understand that you can offset interest against rental. I'm guessing you couldn't then use same interest payments to reduce your CGT. (Think that's what applies in France and therefore probably Morocco.) Soup Dragon, you guess correct. The interest payments (along with other non-capital costs such as repairs, insurance etc) can only be offset against rental income which will in turn reduce your UK income tax liability. You can't also offset these payments against the Capital Gain I'm afraid. Quote Link to comment Share on other sites More sharing options...
The Soup Dragon Posted August 31, 2006 Share Posted August 31, 2006 Thanks Jetsetter Quote Link to comment Share on other sites More sharing options...
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