10282 selling part of house capital gains

Hello, i have a house in italy which has not been lived in or rented since i have owned it. A couple of neighbours would like to buy a couple of our rooms which back on to their properties. i am a uk resident. do i have to pay capital gains tax in italy or uk?

I have had the property for 5 1/2 years. if i were to become a tax resident in italy - i.e move their next month, which we were thinking of doing, would this change anything?

i dont know much about the 5 yr rule and cant find anything about it in 'laymans speak' that's easy to understand.

grazie & buona giornata!

Category
Legal

Submitted by Anonymous (not verified) on Thu, 08/28/2008 - 09:33

This is the relevant page from the Agenzie delle entrate:

[url=http://www.agenziaentrate.it/ilwwcm/connect/Nsi/Documentazione/Guide+Fiscali/Guide+anni+precedenti/2006/compravendita%20casa/3_vendita_casa]Agenzia delle Entrate - Vendita della casa[/url]

And this is the relevant paragraph confirming the 'five year' rule:

"QUANDO IL VENDITORE PAGA LE IMPOSTE

Il guadagno che si realizza con la vendita della casa rientra nella categoria dei "redditi diversi" ed e' quindi soggetto a tassazione.

Infatti, quando dalla cessione della casa deriva una plusvalenza, che equivale ad una differenza positiva tra il corrispettivo percepito nel periodo d'imposta e il prezzo di acquisto o il costo di costruzione del bene ceduto, aumentato dei costi inerenti il bene stesso, si realizza un valore.

Questo valore, se derivante da una [B]cessione a titolo oneroso di una casa acquistata o costruita da non piu' di 5 anni,[/B] e' considerato come uno dei redditi appartenenti alla categoria "redditi diversi" e, come tale, assoggettato a tassazione con le normali aliquote Irpef."

So there will be no capital gains tax to pay in Italy. (There may be a GCT to pay to the UK Tax authorities)

Submitted by Anonymous (not verified) on Fri, 08/29/2008 - 17:53

Thanks for that information. would you happen to know, if we were to become italian residents and tax residents, to whom we would capital gains if we sold an investment property in the UK?
i did a bit of googling and came across an article at this link: [url=http://www.mjmurphyaccounts.com/24201.html]Michael.J. Murphy A.C.A[/url]
our situation is similar Mr S who has a property to sell in italy and and investment property to sell in the UK. I quote a paragraph...
[I]After careful consideration of the length of ownership of the properties Mr. Smith becomes UK Non Resident & Non Ordinarily Resident, and resident in Tuscany. He sells both properties and pays no capital gains. He can still spend up to 3 months per year in the UK. He must take care if he returns permanently to the UK[/I].

I don't think this can be correct. i believe that if we are italian tax residents and sell an investment property in the uk, we would still have to pay capital gains in the UK at 18%. Am i correct?
grazie & buona notte!
wendy