Time to Take Stock of UK and Overseas Property

British expats and people with holiday homes overseas should take stock in view of recent changes to Capital Gains Tax legislation.

Capital Gains Tax (CGT) has been extended to non-UK residents selling UK residential property. As the tax will be calculated on the gain made after 5th April 2015, owners need to record the value of the property and its general condition now, in order to deal with the tax when they eventually sell. HMRC are likely to challenge any valuation considered unrealistic, therefore a current valuation by a professional is advisable.
The changes are designed to close the loophole that benefited non-residents making a gain on the sale of a UK property where it was not their main home and whilst the aim and ‘headline’ was about tackling wealthy investors in the UK property market, it also affects British expats working overseas.
Until now, Capital Gains Tax was paid only by people resident in the UK. Now, those based overseas will be treated in the same way. Individuals will have the same CGT annual exemption, which is ?11,100 in 2015/16. They will be taxed at the same rate, 18% or 28% depending on the individual’s UK income and the amount of any gain on disposal of the prop…