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Aug052016

08:28:45 am

Top Ten Tax Tips For Foreign Property Owners

The tax laws are spring-loaded to help you if you own real estate, but be careful. To make sure that the correct amount of Income Tax is paid, you should contact HM Revenue & Customs (HMRC) so that they can adjust the deceased's tax calculation. The seller knows that the real value of the coin is $2000 but you can legally state, on the transfer papers, a price of $1. No capital gain. To complete a good Capital Gains Tax Saving Strategy, the Financial Advisor, CPA and Attorney should all be in harmony so that the client can hang onto as much gain as possible.


To determine the optimal tax structure for the sale, you will have to do the maths based on you and your partners capital gains tax rates and then gift ownership of a certain amount to minimise your tax liability. You will need to elect one of the two dwellings as your principle place of residence and a tax will be applied to the sale of your non-primary property. I have some covered call ETFs that distribute largely capital gains (HEE and HEX).


The rate of tax is the same as for the UK resident individuals and trusts (18% or 28% for individuals, 28% for trusts) as is the availability of the annual exempt amount. The capital gains tax will probably be 10 percent if your tax rate is 15 percent, and 20 percent if your tax rate is 28 percent or higher. Subtract the figure on Line 1 (e) from the figure on Line 1 (d) to determine your capital gain. Certificates are treated specially, and only qualify for tax exemption if they have been bought before 15 March 2007. You may need to complete a self assessment tax return if the deceased normally did one.


If your home has appreciated significantly, you can take the home proceeds, purchase a smaller home and retain the difference with no tax consequences. Provided this period is not exceeded the property can be exempt for capital gains tax. But one of the things that people usually don't check on is the way to avoid the high tax bills on their profits.


Capital gains taxes are levied Recommended Reading on the difference between what you paid for an asset (also known as your basis) and what you sell the asset for, and they're divided into short-term and long-term gains based on the amount of time you owned the asset. If the house being transferred was not the principal residence but was a cottage or rental property, it is subject to capital gains tax, even if it's being given to the deceased's own children. It is important to refer to a list of tax deductions and you will simply be amazed how many hundreds of dollars you could have had deducted had you bothered to do this.




Generally, you can calculate your net capital gain by adding up your capital gains over the financial year and then subtracting your capital losses (including any net capital losses from previous years) and any capital gains discounts (or any small business CGT concession6 you minimize capital gains may be entitled to).

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