Foreign Capital Gains

I recently read a post on this forum (cut and pastes):- I recently sold my holiday home in Florida and found that 15% of the sale price was held back under a scheme called FIRPTA (Foreign Investment in Real Property Tax Act). My question is: do I pay my CGT to IRS or to HMRC (I believe that there is a Double Taxation Agreement [DTA] to avoid having to pay to both). If it is paid to the IRS then I would assume that they take it from the 15% that has been held back. If it is paid to HMRC then how do I get my 15% returned to me from USA and how long does that process take? Typically, what forms do I need to complete for HMRC? Posted about a month ago by HMRC Admin 17 UK residents have to declare foreign Capital Gains to HMRC, so you should enter the relevant details in the Capital Gains pages (SA108) of your Self Assessment tax return. Box 14 onwards "other Property Assets and Gains." I myself have sold a holiday home in Florida. I am completing my self assessment form and have recorded the gain as described above under "other Property Assets and Gains." When I go to my tax calculation, it is showing the Capital Gain, being charged at 10% and 20%. I believe the rate on residential property is 18% and 28%. Should i in fact record this gain elsewhere? Or does the foreign holiday home count as "other " asset and not residential property? My tax return is only saved at present, not submitted.

Hi

Both countries have the right to tax the gains from the disposal of the property.  
As the property is located in the USA, the double taxation treaty, will give the USA the first rights to tax the gains arising from the disposal of the property, so you will pay tax there.  
HMRC can also tax the capital gain from the disposal of an overseas property.  
To avoid being taxed twice on the gains, you would claim a tax credit of up to 100% of the tax paid in the USA, in the foreign sections of the self assessment tax return.  
This credit will be set against the UK capital gains tax, so that you do not pay the tax twice.  
SA100 (tax return) SA106 (foreign) SA108 (Capital gains) and any other supplementary pages that are appropriate.  
The property is a residential property, so the gain should be shown in the section for residential property and will be taxed at the rates of 18% and 28%.  
You can download the paper supplementary pages at Self Assessment
If you submit the tax return online, you would tick yes to the foreign sections and capital gains section, as well as those other sections that are appropriate.

Thank you

Thanks for the reply. How do I record the gain on SA 108 for residential property and claim relief for tax paid in the USA?. Boxes 11 says " Total gains or losses on non-UK residential property or carried interest reported on Real Time Transaction returns." As the property sale was foreign, I did not report it on a Real time Transaction return.

Hi Wiggy,
If you’ve filled in the ‘Capital gains summary’ pages and you’ve paid foreign tax on those gains, and you want to claim  
Foreign Tax Credit Relief for the foreign tax, fill in box33 and boxes 37 to  40 on the SA106.
Please do  not  include  these  amounts  in box 2 on  page F  1.
Thank you.