Capital Gains Tax

If you have been actually living in the house, (at least for much of the time), and resident, then you are absolutely in the clear as regards Italian 'plusvalenza'. It is not applicable. The test is where you have been living, (and really does not involve being resident on the anagrafe, though that would help to avoid any questions being raised). Assuming you are UK, you may have a liability to UK CGT.

Its not as simple as that. The whole crux revolves around where your proceeds will be deposited. For example, even with double taxation treaties (UK- Ialy) any potentiial liability will ultimately rest on the tax regime of the country that you are moving the funds to.

Taxation treaties only cover so much, and in this case (Uk/Italy) the laws relating to CGT are different. As I understand it, where you are domiciled is key not where the funds eventually end up. If this was your PPR (principle private residence) then no CGT is liable to UK inland revenue. If it wasnt your PPR even though you had Italian residency, you will still be liable for any profits on sale to UK revenue minus deductions etc. If this is the case get a wriggle on...CGT soon going to be increased in Blighty. good luck.

Think that was what I was trying to say pianopiano. If you are "resident" in the UK, you fall within the UK tax regime for all worldwide earnings, gains etc. Similarly, if you are "resident" in Italy then Italian laws apply on all worldwide earnings, gains. Double taxation treaties mean that tax paid in one country can be offset against tax due in the other.

Presumably, there will only be an issue, if you sell it for more than you paid for it, and that is by no means certain. "Times is hard."

Very true bunterboy but always remember the currency effect. Four years ago £ was at 1.48. Even, today at 1.20 its still a gain of almost 20%. 

But if you pay your plusvalenza at the point of sale to the notaio, your tax liability is covered.

Surely Capo Boi, there must be a Euro gain, the exchange rate cannot influence one's Italian tax liability.

Agreed bunterboy, was only referring to potential cgt liability in the UK.

Hello!  I was under the impression that there is no CGT to pay in Italy if you've owned the property for more than 5 years.  Is this still the case?  Thank you!

Yes no CGT in Italy after 5 yrs........ however that doesnt mean anything to UK revenue......because the 5 yr law does note exist.  If you have a profit after allowances and the property is NOT your principle residence......you will still despite the Italian law have to declare this to UK IR. This is a very common and often costly mistake people make. This issue was exacerbated a few years ago when lower cadastral values were deliberately declared on purchase to lessen tax burden but only served eventually to increase the CGT liability on sale.

moderators no idea why post was published in triplicate only posted once     oiuiuuoiiuio

yiuyiuyiuyiup

I agree with what you have said pianopiano. The lower cadastral value can actually have the effect of turning a true net loss into a gain for UK cgt purposes.

Many thanks for confirming that Pianopiano.  In our case, although we are still UK residents (domicile and tax), this is our only property, and so I would hope that we wouldn't have any problems with UK CGT.