End of UK CGT exemption on property sales for expats

[KittenKong]

Surprised not to have seen a comment on here already about this as it must affect many UK expats living in Thailand.

In the recent autumn statement it was announced that as of April 2015 non-residents will no longer benefit from the existing exemption from UK CGT on UK property sales. This tax could amount to a large percentage of any gain (and gains in the UK property market have been large) and any expat thinking of selling UK property may want to consider doing so before the April 2015 cut-off point.

This change is designed (supposedly) to reduce upward pressure on London property prices caused by investment purchases from non-residents, but if that was really true one would have expected the tax to only apply above a certain value which is not the case.

[topt]

You need to look more closely......

Some discussion of it here - http://www.thaivisa.com/forum/topic/612416-gbp-to-thb-exchange-rate/page-85#entry7132481 and the previous page member mccw made the first comment.

[AyG]

Also discussed at http://www.thaivisa.com/forum/topic/678576-uk-cgt-for-non-resident-property-sales/

[KittenKong]

You need to look more closely......

Some discussion of it here - http://www.thaivisa.com/forum/topic/612416-gbp-to-thb-exchange-rate/page-85#entry7132481 and the previous page member mccw made the first comment.

Ah. Not exactly on-topic so I didnt look for it there.

[KittenKong]

Also discussed at http://www.thaivisa.com/forum/topic/678576-uk-cgt-for-non-resident-property-sales/

Ah. I dont look at the pub sub-forum at all, ever, so no wonder I didn't see it!

However I do think this potentially important topic (for some) deserves a place in a "serious" sub-forum.

[wordchild]

also a thread here started in this forum a couple of weeks ago which the OP seems to have contributed to at the time! http://www.thaivisa.com/forum/topic/682656-expats-to-be-charged-cgt-on-disposal-of-uk-property/

[KittenKong]

Well, at least that thread was in the right place! I'm still surprised that no one has commented on it since it became official.

Perhaps if I was affected personally by it I would be paying more attention.

[Noi657]

Are the UK government worried about us Brits leaving the country, making money from our houses and then spending it all in a foreign country? Don't worry Mr Cameron, you will soon have loads of Bulgarians and Romanians that can supplement us!

[NeverSure]

Deleted

[SheungWan]

Are the UK government worried about us Brits leaving the country, making money from our houses and then spending it all in a foreign country? Don't worry Mr Cameron, you will soon have loads of Bulgarians and Romanians that can supplement us!

UK capital invested overseas generates taxable income as does income tax from East Europeans working in the UK labour market.

[topt]

Are the UK government worried about us Brits leaving the country, making money from our houses and then spending it all in a foreign country? Don't worry Mr Cameron, you will soon have loads of Bulgarians and Romanians that can supplement us!

UK capital invested overseas generates taxable income as does income tax from East Europeans working in the UK labour market.

If we are referring to UK domiciled expats who would normally be non resident for tax then no UK tax liability is generated - and if you plan it well likely no other tax liability

[SheungWan]

Are the UK government worried about us Brits leaving the country, making money from our houses and then spending it all in a foreign country? Don't worry Mr Cameron, you will soon have loads of Bulgarians and Romanians that can supplement us!

UK capital invested overseas generates taxable income as does income tax from East Europeans working in the UK labour market.

If we are referring to UK domiciled expats who would normally be non resident for tax then no UK tax liability is generated - and if you plan it well likely no other tax liability

The topic at hand is CGT on property so if one is not going to be treated as a UK-resident for CGT then one is going to be treated as an overseas investor. Becoming non-domiciled or non-resident will not help in that regard.

[salavan]

i have just read that the chancellor says that "the tax will apply to "future gains" so any increase before 2015 wont be taken into account".

has anyone heard the same thing as 1 i didn't hear his speech 2 cant always believe what you read

[wordchild]

i have just read that the chancellor says that "the tax will apply to "future gains" so any increase before 2015 wont be taken into account".

has anyone heard the same thing as 1 i didn't hear his speech 2 cant always believe what you read

yes thats what the press reports said Its not clear how the tax will work yet; there will be a period of consultation before its introduction in 2015 and then (according to the reports) it will apply only to gains made from then on. How they work that out, for those who already own their property, will ,i would guess , be one of the main issues debated during the consultation process.

[KittenKong]

i have just read that the chancellor says that "the tax will apply to "future gains" so any increase before 2015 wont be taken into account".

has anyone heard the same thing as 1 i didn't hear his speech 2 cant always believe what you read

I read that too. I did watch the speech but I don't recall him being specific about the details (it's usually the same with the budget).

[astral]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

[alfieconn]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

Even if your not living there and it's being rented out ?

[alfieconn]

Posted 2013-12-08 08:37:49

Surprised not to have seen a comment on here already about this as it must affect many UK expats living in Thailand.

In the recent autumn statement it was announced that as of April 2015 non-residents will no longer benefit from the existing exemption from UK CGT on UK property sales. This tax could amount to a large percentage of any gain (and gains in the UK property market have been large) and any expat thinking of selling UK property may want to consider doing so before the April 2015 cut-off point.

This change is designed (supposedly) to reduce upward pressure on London property prices caused by investment purchases from non-residents, but if that was really true one would have expected the tax to only apply above a certain value which is not the case.

The govt said that it was purely for tax purposes :

From Gov.uk

ensure that those with the most in society make a fair contribution, including by introducing capital gains tax on gains made by non-residents disposing of UK residential property

[wordchild]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

not if you are non resident for tax purposes

[KittenKong]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

That only works if you are resident in the UK, which of course is not the case for non-resident expats.

Anyone still resident in the UK would not be affected by the new rules anyway as they are already subject to CGT under existing rules.

The important part of this new rule is that it makes non-resident expats liable to a tax from which they are currently completely exempt. It could be the thin end of a wedge that might make such persons also subject to CGT on shares and gilts (unlikely as this is).

[MichaelJohn]

if you rent your property that was your main house then instead of 36 months "free" of CGT it's being cut to 18 months from April 2014.

If you have an income from the property I believe you will be liable for UK tax and CGT.

[KittenKong]

If you have an income from the property I believe you will be liable for UK tax and CGT.

For non-residents? Income tax yes, CGT no. At least not until this new rule takes affect.

[Arkady]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

You can only do this, if you re-establish yourself as tax resident in the UK. Then, as far as I know, you would become taxable on gains for the years that it wasn't your PPP while you were abroad. If you have been abroad a long time, that would make it better to sell it the year before you return to ensure you are not tax resident for any of that year.

[topt]

Unless you own multiple properties, I do not see a problem

Surely you can still nominate the property as your Principal Primary Residence

and claim exemption?

You can only do this, if you re-establish yourself as tax resident in the UK. Then, as far as I know, you would become taxable on gains for the years that it wasn't your PPP while you were abroad. If you have been abroad a long time, that would make it better to sell it the year before you return to ensure you are not tax resident for any of that year.

Under the new proposal you would still get stuffed unless you sell before April 2015.

Surely if you come back for a year/18 months say and live in it then that would not apply? Also how could they tell? And under the most recent guidelines you become resident for tax purposes after a very short time - less than the old 90 days from memory.

I would be interested if anybody knows for sure?

[SheungWan]

Under the new proposal you would still get stuffed unless you sell before April 2015.

Surely if you come back for a year/18 months say and live in it then that would not apply? Also how could they tell? And under the most recent guidelines you become resident for tax purposes after a very short time - less than the old 90 days from memory.

I would be interested if anybody knows for sure?

The rules are not there to delay becoming resident for tax purposes. They are there to prevent people claiming non-resident status, so on return claiming resident tax status is not an issue. Living in a property for 18 months and claiming non-resident status however, would represent a liability for false declaration. Either way, switching tax status it is a good idea to employ an accountant to smooth the process.

[topt]

Under the new proposal you would still get stuffed unless you sell before April 2015.

Surely if you come back for a year/18 months say and live in it then that would not apply? Also how could they tell? And under the most recent guidelines you become resident for tax purposes after a very short time - less than the old 90 days from memory.

I would be interested if anybody knows for sure?

The rules are not there to delay becoming resident for tax purposes. They are there to prevent people claiming non-resident status, so on return claiming resident tax status is not an issue. Living in a property for 18 months and claiming non-resident status however, would represent a liability for false declaration. Either way, switching tax status it is a good idea to employ an accountant to smooth the process.

You appear to have completely misunderstood -

I was not suggesting trying to return and live in the UK and claim non resident tax status if that is what you are suggesting.

If you return to live in your only home and are resident for tax and then sell your only home (that you are living in) then is and how would there be any CGT payable?

[SheungWan]

Under the new proposal you would still get stuffed unless you sell before April 2015.

Surely if you come back for a year/18 months say and live in it then that would not apply? Also how could they tell? And under the most recent guidelines you become resident for tax purposes after a very short time - less than the old 90 days from memory.

I would be interested if anybody knows for sure?

The rules are not there to delay becoming resident for tax purposes. They are there to prevent people claiming non-resident status, so on return claiming resident tax status is not an issue. Living in a property for 18 months and claiming non-resident status however, would represent a liability for false declaration. Either way, switching tax status it is a good idea to employ an accountant to smooth the process.

You appear to have completely misunderstood -

I was not suggesting trying to return and live in the UK and claim non resident tax status if that is what you are suggesting.

If you return to live in your only home and are resident for tax and then sell your only home (that you are living in) then is and how would there be any CGT payable?

'Return' has no meaning unless you state what is your taxable status at the point of return. If you are resident for taxable purposes then nobody cares whether you are abroad or not as far as taxable issues are concerned.

[Jim walker]

A good Accountant will handle your tax liability for you and help avoid having paying too much tax

[Noi657]

Are the UK government worried about us Brits leaving the country, making money from our houses and then spending it all in a foreign country? Don't worry Mr Cameron, you will soon have loads of Bulgarians and Romanians that can supplement us!

UK capital invested overseas generates taxable income as does income tax from East Europeans working in the UK labour market.

Oh I see... So all the Romanians etc in the UK at the moment, waiting at 6:30am on the streets of London for some work, they are paying taxes?