Conned

Jain and Chris · #20 08-05-2008, 12:03 PM

Hello Runchev

I think we better clear this up.

There is a HUGE problem for owners residing in the UK when the price they pay is not declared in the deeds. They are liable to large capital gains tax in the UK. Not only upon re-selling but in theory at the moment they buy the property - a tax which they should not be liable to pay on a theoretical gain !!!

Any tax "saved" by under-declaring is completely obliterated by a much much higher capital gains tax applied.

As for your comment of "Something else, a lot of you do not know, that if you keep your property for more than 5 years time - YOU DO NOT PAY CAPITAL GAINS TAX!"

Not true. If you are resident in Bulgaria and own an property as an individual or are a Bulgarian citizen the up to date situation is that you may sell up to one property per year and you pay no capital gains in Bulgaria. You no longer have to own it for five years.

However, no matter how long you own a Bulgarian property, when you own it as an individual and one who is resident in the UK, you are liable to capital gains tax in Britain.

Also, if you own the property by the use of the vehicle of a Bulgarian company, when you sell the property you are subject to corporation tax in Bulgaria.

Oh, yes, it might only be "10% man!" for an individual owning a property in Bulgaria - but then there is further capital gains to be paid in the UK - much more than that 10%. Anyway, why should anyone be forced to pay on a gain which they have not made just because someone in Bulgaria says it is normal practice??????

Any vendor should be so lucky to find a foreigner now who will fall for the "put a lower price in the deeds and pay me the rest in cash" scenario; so those buyers who have fallen foul of this practice are well and truly hung out to dry.

So, as you can see, it really is a major issue under-declaring the price on the deeds - if any buyer meets anyone who says this is normal practice run a mile would be my advice!