Very useful article! Could you elaborate on... "If you signed your final purchase contract after 1 January 2007 you are liable for 19% capital gains tax on the profit. If you are a registered as living at the unit for 12 months then you do not pay capital gains tax. In addition there is no cpaital gains tax if you sell your property after five years." What constitutes registered as living in the unit? D

Sorry Dan - no answer, just another question... Hi Andrea, a very interesting and useful article. Could you clarify the following please: 'There is no escaping the 40% capital gains tax for a UK resident. If you sell before five years of signing a Final Purchase Contract - you will be liable for tax on the capital gains twice - once in the country where the investment property is and secondly, in the country where you are a tax resident. If you sell after five years of signing a Final Purchase Contract - you can make a single payment to the UK's Inland Revenue.' So (assuming you declare everything properly to the inland revenue) this would mean that regardless of whether you sell before or after five years, you will still pay a total of 40% tax. It is simply a matter of whether some of that tax is paid in Poland. Is this right?

A related point to this (I hope it's not too obvious)... UK taper relief will reduce your capital gains tax liability in the UK if you hold up to 10 years. Also, I have been informed that if the property is a retail property then the taper relief is more generous: After 1 year – 50% CGT relief After 2 years – 75% CGT relief So, on non-residential property, after 2 years CGT tax is essentially 10% (40% of 25%). On residential property, after 10 years taper the CGT is essentially 24% (40% of 60%). (if there are any accountants reading then please correct me if I am wrong).

Very good article. Just to be sure, where you say: "If you sell before five years of signing a Final Purchase Contract - you will be liable for tax on the capital gains twice - once in the country where the investment property is and secondly, in the country where you are a tax resident. If you sell after five years of signing a Final Purchase Contract - you can make a single payment to the UK's Inland Revenue." Would I be right in saying that this could be rephrased to say - - There may be liability to capital gains tax in both Poland and the UK, subject to double taxation relief. - Where there is no liability for tax in Poland (as per the situations explained elsewhere in your excellent article), then it is only necessary to pay the UK tax. If it doesn't mean the above, then I am confused! Stephen

Hi Good question - we've just had a mini debate here in the office and the legal team are checking it out for me. I'll try and get back to today but could be monday if that's ok. Thanks

Hi That's it exactly - there is no escaping the 40% capital gains - it is just a case of timing which dictates where the money is collected. Thanks Andrea

Hi The above is right but you have to consider the time factor which dictates where your capital gains tax is finally made. If you sell five years after signing the final purchase contract then you pay nothing in Poland - just your UK tax. There is liability for capital gains tax in both Poland and the UK if you sell within five years of signing your final purchase contract. thanks Andrea -

1. "If you sell five years after signing the final purchase contract then you pay nothing in Poland - just your UK tax". From my information the law above has changed and this five year rul no longer applies. 2. Also can you clarify the following You say that if a person sells/"flips" at Stage 1, preliminary contract they are subject to Polish Income Tax. Again, if this is true, then this Polish Income Tax cannot be set off against UK Capital Gains Tax. 3.Also what about the difference in VAT rates on property when someone sells/assigns their right to a property as opposed to the property itself?

Hi Dan, Sorry for the wait but checked out it out with our Polish lawyers. This is the answer from TGC Corporate Lawyers: Anyone resident in Poland for over 183 days is deemed to be a tax resident for income tax purposes. But, depending on any double taxation treaty signed with Poland, it may be argued that this period should be longer. However, this does not apply to CGT which is payable on property in Poland. TGC warns that the concept of being a tax domicile is legally complex and anyone considering it needs to get professional tax advice. Hope this helps - Andrea