Ex-pats to face capital gains tax on house sales

[Anne B]

"Thousands of Britons living abroad face being caught up in a tax raid on wealthy foreigners buying and selling property in the UK. George Osborne, the Chancellor, is preparing to announce that capital gains tax will be charged on British property sold by overseas nationals and expats.The Coalition plan was disclosed by Nick Clegg, the Deputy Prime Minister, who said that the proposals would ensure that wealthy foreigners who buy and sell British property “pay their fair share”.

 

 

However, it is understood that Mr Clegg’s plan would also apply to British people living abroad and who are classed as non-residents here, but still own property in the UK. Tax experts warned that the measures could have significant consequences for Britons who go abroad to work while retaining property in the UK that they may wish to sell."

 

It might only apply if you have 2 properties, 1 here and 1 there, in which case it won't affect so many people.

"The new policy would impose a capital-gains tax of 28 per cent on the sale of second homes in the UK that are owned by overseas investors, including expats, it is understood."

 

Read the full story here

 

http://www.telegraph.co.uk/expat/expatnews/10458673/Thousands-of-Britons-caught-up-in-tax-raid-on-wealthy-foreigners.html

Edited November 19, 2013 by Anne B

[Andrew from Vista Financial]

Thanks for sharing Anne.

 

Very interesting and could affect a lot migrants as many do keep hold of their former UK home!!

 

 

Regards

 

 

Andy

[Guest EllieM]

Really really hope this does not happen!

[paulandkerry]

Thanks for sharing I hadn't heard about this.

 

Presumably it's 28% of the gain since acquisition with it being titled Capital Gains Tax?

 

Kerry

[Diane]

Thanks for that - not often that I'm happy we sold my forever house before moving out here, but am now!

[srg73]

This is a very difficult proposal to disagree with as house prices in London are flying due to international investment therefore pricing out most people, sound very much like Sydney. However on a personal level this would reinforce our thoughts to sell our uk house and invest in an Australian home. This is greater incentive for us to make the move permanant and remove the easy escape route back to uk if things become a little difficult in Oz.

 

S

Edited November 19, 2013 by srg73

[TheHarrisonFamily]

Devastating news.

We didn't sell as the exchange rate was so poor. So we rented it out.

we get hammered by the Aussie taxman as they take the rent as income.

We took out a massive mortgage here, knowing we had collateral in our UK house, with the intention of selling our UK house in the new year, as the exchange rate has picked up. Have struggled, thinking we will pay off a bulk of the mortgage when we bring our UK house sale money over, only for this news!!

Just cant believe it!

[guspjmh]

Sell now, before they bring it in!

 

We were in two minds about selling before we leave, as we had a really nice old house in a great area which was always going to go up fast when house prices boom, but decided to sell due to hassle of managing from abroad. We were so so sad when we handed keys over, but this policy has softened the blow.

 

Feel so sorry for those who made the other decision, as it was genuinely a 50-50 for us.

[Andrew from Vista Financial]

Devastating news.

We didn't sell as the exchange rate was so poor. So we rented it out.

we get hammered by the Aussie taxman as they take the rent as income.

We took out a massive mortgage here, knowing we had collateral in our UK house, with the intention of selling our UK house in the new year, as the exchange rate has picked up. Have struggled, thinking we will pay off a bulk of the mortgage when we bring our UK house sale money over, only for this news!!

Just cant believe it!

 

 

 

These are proposals at this stage, I would not rush into anything without understanding the full implications.

 

Remember that Capital Gains Tax only applies if there is a gain so paying tax on money gained is better then not paying tax due to no gains.

 

Also the exemptions allowed on former owner occupied homes still stand which could also mitigate any potential CGT liability.

 

Your best bet would be to take professional tax advice if you are considering selling at some point in the future so as to plan for it as best as you can.

 

Seeing as (if permanent resident) there are likely to be some Australian tax considerations come into the equation, seeking advice from someone that is capable of dealing with both tax regimes would be prudent.

 

Regards

 

Andy