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  #41  
Old 22.08.2014, 22:36
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Re: Proposed Capital Gains Tax on UK property for expats

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Has anyone got clarity on the final wording of the bill?


AbFab's link was the minutes of the consultation. We're trying to confirm one way or another what the final decision is. The consultation suggests CGT on CG from April 2015, i.e. setting the property value at that point moving forward... vs. GC made from the original purchase price.


We even asked a UK solicitor and she suggested it was the latter! Ouch...


TIA

That would be a bit mad if was tax on all capital gain from purchase.
We bought our house in 1993 for 100,000 and is is now valued at 420,000 ish. That's a capital gain of 320,000. We moved to Zug in 2013 and have been here for 1 year and plan to return to UK in September 2016.
So if we then sell house in October 2017 (What we plan to do and retire to Cornwall) .....We would have to pay capital gains tax on 320K ! ....
We would not sell if that was the case.
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  #42  
Old 22.08.2014, 22:37
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Re: Proposed Capital Gains Tax on UK property for expats

Seems fair to me, really. surely if you live in the house as your main house when back in UK, for a long enough period, you shouldn't have to pay pay tax anyhow. Is the house in UK rented now and bringing an income.
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  #43  
Old 22.08.2014, 22:44
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Re: Proposed Capital Gains Tax on UK property for expats

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That would be a bit mad if was tax on all capital gain from purchase.
We bought our house in 1993 for 100,000 and is is now valued at 420,000 ish. That's a capital gain of 320,000. We moved to Zug in 2013 and have been here for 1 year and plan to return to UK in September 2016.
So if we then sell house in October 2017 (What we plan to do and retire to Cornwall) .....We would have to pay capital gains tax on 320K ! ....
We would not sell if that was the case.
What is mad is irrelevant, and you might argue FACTA is mad too, but I don't see it stopping anytime soon. I've asked for a link to the final bill so that I can make a judgement myself, given that a solicitor who specialises in housing has suggested that this is indeed the case. I've looked online and couldn't find anything, so we've also written to HMRC.

Edited to add

Found this http://www.berkeley-law.com/download...april-2014.pdf

Which doesn't add much but suggests the norm is to rebase to estimated value in April 2016. It also suggests that final legislation will not be available until Dec 2014... Cue a mad rush for everyone to sell...
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  #44  
Old 22.08.2014, 22:48
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Proposed Capital Gains Tax on UK property for expats

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That would be a bit mad if was tax on all capital gain from purchase.

We bought our house in 1993 for 100,000 and is is now valued at 420,000 ish. That's a capital gain of 320,000. We moved to Zug in 2013 and have been here for 1 year and plan to return to UK in September 2016.

So if we then sell house in October 2017 (What we plan to do and retire to Cornwall) .....We would have to pay capital gains tax on 320K ! ....

We would not sell if that was the case.


CGT max rate is 28%, of course by 2017 UK houses could be worth substantially less than today, of course if your really lucky you won't make a capital gain at all ......... Paying some tax at 18% then 28% is not the worst outcome.

You could of course sell tomorrow tax free, first world problems.
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  #45  
Old 22.08.2014, 22:52
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Re: Proposed Capital Gains Tax on UK property for expats

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CGT max rate is 28%, of course by 2017 UK houses could be worth substantially less than today, of course if your really lucky you won't make a capital gain at all ......... Paying some tax at 18% then 28% is not the worst outcome.

You could of course sell tomorrow tax free, first world problems.
or simply don't sell and then no CGT :-)

Worse case would be let property and move on.
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  #46  
Old 22.08.2014, 22:56
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Re: Proposed Capital Gains Tax on UK property for expats

My feeling is that it will play out as ;

- CGT on CG from April 2015.
- Tax applicable if you have non UK residence at time of sale.

That way property speculators or over seas investors will pay tax on gains , however people taking over seas roles for a few years and then returning to UK, will not be impacted.
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  #47  
Old 22.08.2014, 23:05
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Re: Proposed Capital Gains Tax on UK property for expats

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My feeling is that it will play out as ;



- CGT on CG from April 2015.

- Tax applicable if you have non UK residence at time of sale.



That way property speculators or over seas investors will pay tax on gains , however people taking over seas roles for a few years and then returning to UK, will not be impacted.

As very few voters are effected, it could easily become CGT payable from becoming non res. bear in mind that CGT losses on a property even a main residence may be carried forward to future capital gains so could turn out to be interesting. London house prices have started to fall.....
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  #48  
Old 22.08.2014, 23:10
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Re: Proposed Capital Gains Tax on UK property for expats

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As very few voters are effected, it could easily become CGT payable from becoming non res. bear in mind that CGT losses on a property even a main residence may be carried forward to future capital gains so could turn out to be interesting. London house prices have started to fall.....
And if you sell when you have been a UK resident for a year plus ?
Gain from becoming Non-res and becoming res again ?
Starting to sound messy.
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  #49  
Old 22.08.2014, 23:16
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Proposed Capital Gains Tax on UK property for expats

Currently 0 tax, after 5th April who knows, hmrc have made retrospective changes that effect ex pats, I would not put anything past them.

They seem to have given away IHT liability that remained for at least 20 years after leaving, I can't believe that will really happen & also people who acquired a UK passport should fall into that net, rather than just UK passport holders from birth.
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  #50  
Old 22.08.2014, 23:27
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Re: Proposed Capital Gains Tax on UK property for expats

Hi Mr Smith - We have an opportunity for you and your family to spend a couple of years in country X. But the draw back is that when you return and sell your house one day , the capital gain you have made since you bought it in 2000 is liable to CGT.
Err thanks , but no thanks lol
Companies will have fun getting employees to take the opportunity of a few years in country X.
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  #51  
Old 22.08.2014, 23:52
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Re: Proposed Capital Gains Tax on UK property for expats

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Hi Mr Smith - We have an opportunity for you and your family to spend a couple of years in country X. But the draw back is that when you return and sell your house one day , the capital gain you have made since you bought it in 2000 is liable to CGT.
Err thanks , but no thanks lol
Companies will have fun getting employees to take the opportunity of a few years in country X.
Why not sell when you leave, or don't sell at all, CGT is an entirely optional tax. The sooner CGT is applied to primary residence in the UK the better. House prices will be substantially lower which will benefit the economy & future generations. House prices can never be unaffordable for long. If the next generation can't afford to buy who will you sell your house to?

Your under the false impression that your wealth belongs to you, most governments believe your money is their money, it's only the timescale in which they take it that differs.
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  #52  
Old 23.08.2014, 00:23
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Re: Proposed Capital Gains Tax on UK property for expats

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Why not sell when you leave, or don't sell at all, CGT is an entirely optional tax. The sooner CGT is applied to primary residence in the UK the better. House prices will be substantially lower which will benefit the economy & future generations. House prices can never be unaffordable for long. If the next generation can't afford to buy who will you sell your house to?

Your under the false impression that your wealth belongs to you, most governments believe your money is their money, it's only the timescale in which they take it that differs.
The cost of selling a house and rebuying two years later, would cost approx. 30k plus with stamp duty , estate agent fees, law costs, search, decorating to your taste in new house .....
I would imagine most people on assignments would let house or as we have get family to house sit for three years.
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  #53  
Old 23.08.2014, 00:27
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Re: Proposed Capital Gains Tax on UK property for expats

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Why not sell when you leave, or don't sell at all, CGT is an entirely optional tax. The sooner CGT is applied to primary residence in the UK the better. House prices will be substantially lower which will benefit the economy & future generations. House prices can never be unaffordable for long. If the next generation can't afford to buy who will you sell your house to?

Your under the false impression that your wealth belongs to you, most governments believe your money is their money, it's only the timescale in which they take it that differs.
How would applying CGT on primary property sales reduce house prices and help the young ? Will it not simply stop people moving and thus cause a property shortage. Ie people in there first home simply extend rather than moving or don't move and thus fewer properties for next first home owners.

The market is due for a correction soon anyway or England becomes a nation of renters like in CH.
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  #54  
Old 23.08.2014, 13:00
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Re: Proposed Capital Gains Tax on UK property for expats

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How would applying CGT on primary property sales reduce house prices and help the young ? Will it not simply stop people moving and thus cause a property shortage. Ie people in there first home simply extend rather than moving or don't move and thus fewer properties for next first home owners.

The market is due for a correction soon anyway or England becomes a nation of renters like in CH.
The price is based on what people can afford to pay, nothing else. Ultimately if people can only save a 10k deposit & borrow 75% house prices would stabilize at 40k, it would be interesting to know how big a deposit today's 25years will have saved up? probably less than 10k so house prices of 200,000 does not seem sustainable.

People often have to sell because the house is to small or to big, or they can't afford the mortgage. Bizarrely the price of repossessions is not recorded in the land registry figures, thereby distorting the actual market value.

Since couples buy houses together & both work their spending power doubles, so what actually happens? prices double, they don't get a bigger house for their money.
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Old 23.08.2014, 13:04
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Re: Proposed Capital Gains Tax on UK property for expats

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How would applying CGT on primary property sales reduce house prices and help the young ? Will it not simply stop people moving and thus cause a property shortage. Ie people in there first home simply extend rather than moving or don't move and thus fewer properties for next first home owners.

The market is due for a correction soon anyway or England becomes a nation of renters like in CH.
This is already happening in a big way- extending and improving instead of moving- partly due to stamp duty- been going on for quite some time. And yes, in London most people rent already- and spreading to other parts of the UK.
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  #56  
Old 23.08.2014, 14:04
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Re: Proposed Capital Gains Tax on UK property for expats

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The price is based on what people can afford to pay, nothing else. Ultimately if people can only save a 10k deposit & borrow 75% house prices would stabilize at 40k, it would be interesting to know how big a deposit today's 25years will have saved up? probably less than 10k so house prices of 200,000 does not seem sustainable.

People often have to sell because the house is to small or to big, or they can't afford the mortgage. Bizarrely the price of repossessions is not recorded in the land registry figures, thereby distorting the actual market value.

Since couples buy houses together & both work their spending power doubles, so what actually happens? prices double, they don't get a bigger house for their money.
FTB average deposit is around 30k in the UK.
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  #57  
Old 23.08.2014, 15:29
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Re: Proposed Capital Gains Tax on UK property for expats

For those who have concern re paying CGT on a property when being absent from UK for a few years, are you Registered to Vote?

There seems to be minimal Expats who are registered to vote. I believe you can vote for around 15 years whilst being out of the UK. Here is the site for those of you who have not yet done so

http://www.aboutmyvote.co.uk/default.aspx

here is an article about the millions of Britons abroad who are not registered to vote

http://www.telegraph.co.uk/expat/exp...fell-flat.html

Something to think about
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  #58  
Old 23.08.2014, 15:33
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Re: Proposed Capital Gains Tax on UK property for expats

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FTB average deposit is around 30k in the UK.
However the average age of a FTB is a lot older than it was historically, even so with normal lending criteria, 25% deposit UK average house price should be 100k, so a 50-60% fall from today's levels is to be expected! once all the silly help to buy (an overpriced house you should not buy) schemes come to an end.
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  #59  
Old 23.08.2014, 16:13
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Re: Proposed Capital Gains Tax on UK property for expats

House prices in UK have been peaking on and off in my memory since a high in Summer 1988. Since then several ups and downs.

Heavily impacts on new buildings and the construction industry when property prices fall.

Like for like, I compared high in 2007 to now, the percentage increase around 20 to 30% in early summer this year, depending on location. My comparison was an flat / apartment in London.

Prices have been slightly on a down turn since summer, caused by the amount of extra properties on the market whilst people are selling at the higher end.
Some Buyers had been rushing to buy when they can get secured low mortgage interest rates now, as rumour continues 'interest rates' will rise.

I find the 50 to 60% percentage drop rather a lot, but maybe depends where in the scale of prices one is.

If anyone wants to find prices for UK, then here is a link

http://www.zoopla.co.uk/

you can easily get most sold prices for the past 5 years and I recall once I could find it for 10 years, but can not remember how I did that.
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Old 23.08.2014, 18:34
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Re: Proposed Capital Gains Tax on UK property for expats

Rising property prices are simply due to demand and supply.
Pure economics.
People need somewhere to live and the UK population is growing and number of properties being built is not. So until supply starts to meet demand, prices will continue to rise. Who at the age of 35 wants to be living with mum and dad ?
Even if people rent, landlords will still need property to let (demand).
Also people are living longer. Yes they might downsize , but this creates demand for smaller property (prices will rise).
Glad I'm not a first time buyer. It was hard enough for me 26 years ago when mortgage was 3 times single earnings or 2 1/2 times joint income.
Renting as an option ....Yes it is a solution, but who wants to be paying a monthly rent when they are 60 or 70 and at the mercy of a landlord , who might decide to sell up and force you to move ?
We paid up our mortgage last year after 25 years and can live in our house rent/mortgage free and move or not move when we want to.
Survived interest rates of 10% plus and have the badge.
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