UK CGT due in the UK? Sale of property (land) in Germany



The facts:
- I am self employed,
- German Citizen but have been living in the UK for 15y and pay my taxes in the UK. I have a settled status in the UK.
- I own land (without any buildings) in Germany which I would like to sell
- As per German law my tax due in Germany for this would be €0 (If you own property a certain number of years in Germany then the tax is 0)
- There is a double taxation treaty between Germany and the UK which states that I can be taxed in Germany for the gains of this sale ( Article 6 and 13 are the relevant ones.

- A family member in Germany feels that I should not be due for tax in the UK due to this treaty, he feels it overrides UK national law (being an international treaty)
- From research in the internet my understanding is that there is still CGT due in the UK as I pay tax there and within the UK my worldwide income/gains are taxable.

My question:
Who is right, is tax due (and needs to be declared on the self assessment form). Or does the taxation treaty excempt me from tax in the UK in this case?

Thanks a lot in advance for your advise!
Apr 2, 2011
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Article 6 is not relevant, being concerned with income rather than gains (other than delivering a definition for the purpose of Article 13).

Presumably you are relying on sub paragraph 1 of Article 13, but note the specific wording, which states that the gain "may be taxed in that other State". the use of the word "may" is unrestricted, and simply allows the gain to be taxed in the other state, but not to the exclusion of the taxing rights of the State where you are resident. (see sub paragraphs 4 and 5 where the wording is more restrictive).

You are correct, in that is must still be reported and taxed in the UK.

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