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Post by wayne lovelace on May 18, 2004 16:04:41 GMT 1
I have got a question regarding Capital Gains Tax. I bought Martin Wesby's book which i found very informative. In it he said that you have to own the property for over 3 years you don't pay capital gains tax. I am worried that there are other stipulations which may require capital gains to be paid. Can someone please let me know the situation and how to avoid paying Capital Gains, If i ever need to sell Thanks in advance, Wayne
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Post by Peter J on May 25, 2004 10:32:42 GMT 1
I am also very interested in the CGT aspect. If it is true -wouldn't the British Inland Revenue have something to say about its nationals making tax free gains abroad? Wouldn't this make Croatia a perfect tax haven?
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Post by Peter Ellis on May 26, 2004 23:58:45 GMT 1
The main thing to note is that the three years dates from when the property has been entered in to the Land Registry. It doesn't date from when the contract was signed. Otherwise, provided that the 3 years has elapsed, yes, the sale is free of CGT.
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Post by Culchie on Jul 5, 2004 13:44:46 GMT 1
Hi Peter, correct me if i am wrong.
I understand that if a citizen of a country (e.g UK or Ireland) which has a tax treaty with Croatia (which they have), then CGT must be paid in their country of residence.
In my case, I must declare any rental income to the irish tax authorities, and if i sell the property (even after 3 years), then I must must declare the sale and pay 20% capital gains tax. (I don't know the CGT rate for Britain, but whatever it is, it must be paid).
If I were a resident of a country that does not have a joint tax treaty with Croatia, I do not have to pay CGT.
I really do hope I'm wrong, but I don't think so.
Regards,
Culchie
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Post by Peter Ellis on Jul 5, 2004 19:49:58 GMT 1
Hi Culchie,
I'm no tax expert and I'd need to check that with one. I know there is a tax treaty with the UK but whether that raises CGT implications if none were liable here under the right circumstances, I don't know.
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Post by Culchie on Jul 6, 2004 10:09:20 GMT 1
Thanks Peter,
Will await your findings with interest.
Regards,
Culchie
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Post by Culchie on Jul 11, 2004 20:50:48 GMT 1
Hi Peter,
Any news on this query?
Regards,
Culchie
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Post by Culchie on Jul 26, 2004 12:45:07 GMT 1
Hi Peter,
Do you have any news regarding my query on Capital Gains Tax for UK or Irish Buyers?
Regards
Culchie
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Post by Graham Amiss - Bosmere Travel on Jul 26, 2004 13:13:40 GMT 1
Culchie, Try your local office of KPMG, they sould be able to give you the advice for Irish citizens and their liabilities both there and in Croatia - you might have to pay them to tell you though
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Post by Culchie on Jul 26, 2004 13:24:23 GMT 1
Thanks Graham, I'll have to do that I think, as I'm not getting a reply here ! I notice that people in the property business are using the 3 year CGT exempt rule as a selling point for property in Croatia, and to the best of my knowlege that only applies to Croatian citizens or those who belong to countries who do not have a tax treaty in place. According to Martin Westby's book (which is principally written for the UK market) and also Peter's above posting seem to indicate that one does not have to pay CGT on property after 3 years. This question is a most basic, yet fundamental one to all would be investors in Croatia, so hence my asking the question on the property board. I would have thought that this forum on Croatia Property Services would be an appropiate place to receive an answer Culchie
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Post by Graham Amiss - Bosmere Travel on Jul 26, 2004 13:48:23 GMT 1
Acccountants, Lawyers and Estate Agents all need to make a few pennies, but as a personal thing I would make sure that I asked the proffession with the knowlege and indemnity insurance if I was in need of professional advice.
I have just got the hump about such things because we have has a spate of calls from people who have been taking travel advice from 'non professionals' and have screwed up their hols. For example the guy who wanted to get to DBV and was told to take the train from Trieste airport! or the guy who booked private accommodation in Cavtat to find that the owner did not supply essentials such as plates and knives and forks! I am the mug that gets calls in the middle of the night asking me to get people out of the wet and warm......
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Post by Culchie on Jul 26, 2004 14:02:02 GMT 1
Yep, I hear ya, I hear ya, and couldn't agree more.
But if them eejeets had bothered to check things out and ask a few questions, it could have saved them and the people like yourself alot of grief.
What adds to the confusion is when people who are involved with and have a vested interest in the Croatian property business promote an advantage (aimed at the UK market of which the vast majority of whom would not qualify for the advantage) which may be technically available but in reality is not the case.
I laid out my understanding based on my research and I guess I'm challenging the view publicly offered by Peter and Martin, amongst others.
Regards,
Culchie.
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Post by Peter Ellis on Jul 26, 2004 14:33:34 GMT 1
Hi Culchie
Thank you for the prod! I've been so busy I'd forgotten to follow this up. I've just spoken to our accountant. She is of the opinion that you need to check with an accountant in your own country as the impetus will come from your own tax authority. Sales here are free of CGT in Croatia if retained for 3 years from date of registration, but the implications for British and Irish tax payers under the treaties would need resolving with an accountant there. Sorry we cannot help more on this.
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Post by Martin Westby on Jul 26, 2004 15:47:16 GMT 1
hi Peter, Are we free from of CGT if we bought as private individuals or is all of this only applicable for theCroatian company route? Ive been in another thread with this one so im trespassing over here now!
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Post by Culchie on Jul 26, 2004 15:59:14 GMT 1
Hi Martin,
As far as I am aware, you're only exempt via the company route.
If you are a UK tax resident, and bought privately, then you will have to pay CGT on your property, even after 3 years....whatever your CGT rate is in the UK (in Ireland it is 20%)...So if I make a €50K net profit after allowable expenses, then I must declare and pay €10K as CGT.
I open to correction on this, but I'm 99% sure this is the case.
Culchie
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