Generally, capital gains tax is payable when you sell or transfer property, shares or other assets, usually on worldwide assets. Depending on the country and type of asset, the gain may be taxed on a sliding scale as income or at a fixed rate.
Where will you pay capital gains tax?
Some countries do not have any capital gains tax, such as Monaco and Gibraltar.
France, Spain and Portugal charge capital gains tax when you sell real estate and investments for a profit. Cyprus and Malta only tax gains made on local real estate.
You don’t need to be resident in a country to be liable for tax. For example, if you sell a Spanish property at a gain, you’ll be liable to Spanish capital gains tax, whether you’re resident there or not.
You can also be taxed on gains from assets located outside your country of residence. If you’re a French resident, say, you’ll pay capital gains tax on any property sold outside of France, even if you bought it long before you moved there.
Capital gains tax in the UK
Even if you’re resident abroad, you may now have to pay UK capital gains tax when you sell a British residential property.
Since the ‘Non-Resident Capital Gains Tax' (NRCGT) rules were introduced, non-residents are now liable to tax when selling a residential UK property. However, this will only apply to gains made from April 2015.
If you’re resident overseas, your UK shares and other assets may still be tax-free in Britain, so long as you’ve been non-UK resident for long enough.
The double tax treaty between the UK and most European countries means you shouldn’t pay the full level of capital gains tax twice on the same property or asset. Generally, you’ll receive a credit for any tax paid on real estate in your resident country and in the UK for other assets.
How we can help with capital gains tax advice
Blevins Franks can advise you on capital gains tax rates and planning. There are steps you can take to avoid or mitigate this tax, particularly for your investments.
If you’re leaving the UK to move abroad, or returning after living overseas, it’s important to seek advice before you move. That way you can establish the best time to sell assets to limit the tax you’ll pay on any gain. You could, for example, save a substantial amount of tax just by waiting until you’re resident in one country rather than another before buying or selling property.