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Old 03-19-2008, 03:31 AM   #1
marlouwrig
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taxation on sale?

Is there any form of tax payable if we were to sell our DVC. Do we (UK residents) receive any different treatment than US nationals

Not wanting to do this and find the thought very depressing but may have to when DH retires in a year or so.
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Old 03-19-2008, 03:46 AM   #2
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I don't know any details, but I understand UK DVCers are liable to tax of some sort if/when they sell their ownership.

Hopefully, someone else will be able to give more information.
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Old 03-19-2008, 05:28 AM   #3
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In the last very few months made some tentative enquiries about selling one of our contracts and learned that we have to pay tax on the whole of the sale money - not just any profit which may be made. I do hope I am wrong there. There is a process which sellers can go through with the tax people which takes about six months and there is no guarantee of getting any back.
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Old 03-19-2008, 04:08 PM   #4
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I am also interested in this subject. I am considering selling my BCV points but this tax issue has appeared out of the blue, (don't remember DVC sales mentioning it). Research I have made indicates that the tax will be taken on the full sales value regardless whether a profit is made or not. Getting it back requires filing US tax returns. That process will no doubt be more complex than a simple bit of form filling.
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Old 03-19-2008, 04:21 PM   #5
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I also understand that if you sell to a UK purchaser and do the transaction in the UK then the tax can probably be avoided as it is automatically collected by US based real estate agents.
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Old 03-19-2008, 04:36 PM   #6
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I wish I had known about this before I bought. I'm not saying that I wouldn't have actually gone ahead with the purchase but I certainly would have thought a bit harder - not that I regret it even so.

I just hate handing my hard earned over to the tax man - especially a US one
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Old 03-19-2008, 06:24 PM   #7
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These threads have some more information on the 10% FIRPTA tax that non-US residents have to pay.

http://www.disboards.com/showthread.php?t=1573736

http://www.disboards.com/showthread.php?t=1623995
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Old 03-20-2008, 09:55 AM   #8
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When I purchased our add-on at Disney in December, I spoke to the legal guy about FIRPTA stuff. He assured me that it is a 10% tax on the PROFIT, not on the selling price.

I put him over it, and he was adamant that this was the case.

We have just placed an OKW 100 point contract for sale through the Timeshare Store, and they advise me that UK sellers are able to reclaim this tax by completing a form.

I am very suspicious about all this, so I'll let you know how things actually work out.
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Old 03-20-2008, 03:08 PM   #9
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Actually thinking of doing the same, look forward to hearing how it goes.
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Old 03-21-2008, 04:23 AM   #10
marlouwrig
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Quote:
Originally Posted by g1kjt View Post
Actually thinking of doing the same, look forward to hearing how it goes.
Thank you. I will be really interested to see how you get on. One thought which has occurred to me is that although if I sold now I would meke a dollar profit by the time the sale proceeds are converted into sterling that profit would largely have disappeared due to the way the exchange rate has fluctuated
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Old 03-21-2008, 02:24 PM   #11
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I am in the process of selling one of my contracts, and the FIRPTA tax is 10% of sale amount, not the profit, you can then apply through an accountant to get the difference back, however, they charge about $500 to do this for you.

So unless your selling a reasonably high points contract it will not be worth it. I think you would also may need a tax id to get it back, but I'm not 100% sure of this as I already have one of these.


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Old 03-21-2008, 04:50 PM   #12
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Quote:
Originally Posted by psharrock View Post
I am in the process of selling one of my contracts, and the FIRPTA tax is 10% of sale amount, not the profit, you can then apply through an accountant to get the difference back, however, they charge about $500 to do this for you.

So unless your selling a reasonably high points contract it will not be worth it. I think you would also may need a tax id to get it back, but I'm not 100% sure of this as I already have one of these.


Paul
Thanks for that, Paul, although it's not great news.

I have checked this out as far as I can on Google, and it does look like all the tax websites do specify that FIRPTA is applicable to the GAIN and not to the sale amount, which would be in keeping with what the Disney "Notary Public" told me in December.

For example, one of many definitions as follows:-

__________________________________________________ _____________

Definitions of Foreign Investment In Real Property Tax Act (FIRPTA)

* A federal law that subjects nonresident aliens and foreign corporations to U.S. income tax on their gains from the disposition of an interest in real property. This definition of Foreign Investment In Real Property Tax Act (FIRPTA) contributed by gulf-coast-associates
__________________________________________________ _____________

I wouldn't mind if it is on the GAIN as that seems reasonable, but if it is on the total sum, it does seem unfair. For example, if I were to buy a villa at $100,000 and sell it one month later for the same price, I don't know how they could reasonably charge $10,000 tax on the sale. Then again, whoever said that taxes should be reasonable?!?

Seems that governments around the world just love thinking up new ways to take money off us!

Anyway, as I said, I'll keep this in mind through the sales process.
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