Capital Gain Tax on foreign property

[Newmaple]

Hi all,

Question regarding CGT.

I currently live in UK. I bought my apartment in 2012 for £300k. It has always been my primary residence.

I became a Canadian PR in October 2017 but have not moved yet.
I will move permanently to Canada early in 2020.

If i sell the house in 2025 for £600k, what would be the taxable amount?

My understanding is that it will be the difference between the proceeds of the sale (£600k) minus the Fair market value of the property when i became a resident for tax purposes (in 2020). So if the value of the property in 2020 is £500k, i will only have to pay CGT on £100k (£600k - £100k).

What I actually paid for the apartment when i first bought it (£300k) is irrelevant as I was not a Canadian resident at the time.

Also, the Fair Market value has to be calculated on the day i become Canadia resident for tax purposes (in 2020) and not when i became a permanent resident (in 2017).

Can you please confirm my understanding is correct?

Thanks a lot for your help.

 

[steaky]

The taxable amount will depends hat province you reside in 2025. Every province has their own tax rates in Canada.

 

[mahi2020]

In your tax returns of 2021 declare that you have property worth million pounds.

CGT will be BIG ZERO

 

[Newmaple]

The taxable amount will depends hat province you reside in 2025. Every province has their own tax rates in Canada.

Thanks for the reply.
Assuming i live in ontario?

 

[mad_hatter]

In your tax returns of 2021 declare that you have property worth million pounds.

CGT will be BIG ZERO

This is tax fraud.

 

[steaky]

Thanks for the reply.
Assuming i live in ontario?

As tax rate varies yearly, it's hard to speculate the tax rate for 2025.

Also the FMV is based on the year you became resident of Canada for tax purposes.

 

[mad_hatter]

Fair market value needs to be calculated in Canadian currency on the date you become tax resident and don't forget you will be subjected to UK capital gain tax when you sell in 2025.

 

[Newmaple]

Fair market value needs to be calculated in Canadian currency on the date you become tax resident and don't forget you will be subjected to UK capital gain tax when you sell in 2025.

Thanks. Isn’t there a doible taxation agreement between UK and Canada?

I assume i will pay CGT in UK first according to UK rules and then if Canada CGT would have been higher, i will pay that difference to Canada. Is that right?

 

[mad_hatter]

I don't think it is a one to one reduction. You should check with an accountant.