Capital Gains Tax
What is the taxation procedure for the incomes through our investment,how does it apply from one country to another
Capital Gains tax is only payable if two or more properties are purchased then sold within a five year period. The amount paid is approximately 25% of the profit. Capital Gain Tax is not payable on the sale of one property. Turkey is a signatory to a Treaty for the Prevention of Double Taxation. In principle this enables off setting tax paid in one of two countries against the tax payable to the other. This prevents double taxation. For more information look at www.worldwidetax.com.
Treaty for Prevention of Double Taxation (which Turkey is signatory of) does not include profit made on property abroad and would still be liable for Capital Gains Tax in the UK if declared on a Self-Assessment Tax form and taken back to the UK in a lump sum. Any profit made from rental income is also subject to taxation in the UK but other expenses can be offset against it. So, all expenditure on the property here can be offet against any tax payable there - this includes furniture, utility bills, monthly maintenance fees etc. Therefore, the total annual expenditure on the house could mean that no tax is payable in the UK at all. Any tax paid here in Turkey a is deducted from any tax payable in the UK which again means that the tax payable would be virtually nil.