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CGT on sale of Bulgarian property

CGT on sale of Bulgarian property

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First post so hello.

I sold my apartment in Bulgaria for 70K Euro last Thursday (minus 2500 costs) and have some questions about the Capital Gains Tax implications I hope you can help with please.
The purchase price in 2002 + expenses and cost of turning it from an off plan shell to a fully furnished rental property were in the region of 50K Euro.  The receipts I have are incomplete and in Bulgarian, which I can't understand, I'd really struggle to produce an accurate figure but 45 to 50K is a fair estimate.

I've never lived there, visited a number of times though, and it's always been a rental place though with long vacant periods.  I have never owned property anywhere else.

I've not made any other Capital Gain in 2013-14.

I've lost a bit on the exchange rates with transfers to purchase and furnish receiving around 1.35 EUR to GBP whereas now it's1.2ish, again though my records aren't great.

My thoughts are 17,500 gain - the exchange rate hit of say 10% = 15,570 Euro gain = 13K GBP so some CGT to pay.

What are your thoughts on what I've shared above please?  Does the rental angle have an impact?

Thanks

Replies (7)

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By johngroganjga
07th Apr 2014 07:47

You can't just say "exchange

You can't just say "exchange rate hit of say 10%" - you actually have to do the calculation.

On your figures, your gain is:

Sale proceeds €67,500 @ 1.2 = £56,250

Cost €50,000 @ 1.35 = £37,037

Gain before annual exemption £19,213

Have you considered whether the property qualifies as a furnished holiday letting?  How did you report the rental income on your UK tax returns?  If it was a FHL you may be entitled to entrepreneur's relief, so the CGT on your gain may be at 10% only.

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Replying to Maslins:
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By beeza650
07th Apr 2014 16:55

..follow up

johngroganjga wrote:

You can't just say "exchange rate hit of say 10%" - you actually have to do the calculation.

On your figures, your gain is:

Sale proceeds €67,500 @ 1.2 = £56,250

Cost €50,000 @ 1.35 = £37,037

Gain before annual exemption £19,213

Have you considered whether the property qualifies as a furnished holiday letting?  How did you report the rental income on your UK tax returns?  If it was a FHL you may be entitled to entrepreneur's relief, so the CGT on your gain may be at 10% only.

I can do my best to work out the exchange rates on the way out but the money was sent over in bits and some as cash even so I should be able to get a pretty good view though.

There hasn't really been any rental income, it's pretty much all been eaten up by losses when tennans left large bills + never ending maintenance so as such I've never re-patriated any income or included it on any tax returns.  It's likely though that there may have been a small income over the period of ownership - maybe 2000 Euro.  I can put that on my SA return this year.

No I've not looked into whether it's a FHL....I just saw elsewhere on the net talk of reduction of CGT because of periods a property was late. Is that not available on places abroad?

Thanks Oliver

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By Portia Nina Levin
24th Apr 2015 20:04

(No subject)

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By ACDWebb
07th Apr 2014 17:34

... and you're sure all those expenses

were allowable against rental income are you?

Taxation of letting income does not quite work on the basis of 'I'll report the net profit over the 11 years of ownership to HMRC when I sell'

Presumably 'talk of reduction of CGT because of periods a property was late' [?let?] is a reference to lettings relief on disposal of a main residence. It has never been your residence. It does not apply.

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By Chipette
07th Apr 2014 18:07

Also, did you have any tax liability arising in Bulgaria from the sale of the flat? I believe there is a double taxation treaty with the UK which would allow you to deduct a tax credit.

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By johngroganjga
07th Apr 2014 20:27

I think you should just take all your papers to a local accountant to get help.

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By beeza650
07th Apr 2014 21:02

Time to get a bit of help

I'll sort of the paperwork as best I can.  Hopefully I can find Bulgarian to help figure out some of the receipts.

I want to get it all squared away properly so I will look up an accountant.

I was told in Bulgaria no taxation was due because of the length of time I'd owned the property.

Shame about the letting only applying to your main residence, that doesn't seem particularly fair since this is my only property.  Oh well.

Thanks for the wake up call. Now to find am accountant...hmmmm

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