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  #61  
Old 23.08.2014, 19:03
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Re: Proposed Capital Gains Tax on UK property for expats

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Rising property prices are simply due to demand and supply.
.
If people were buying with their own money, you would have a point, the thing is they are borrowing most of the money.
Demand is merely the ability to pay, nothing more, the available of easy non status finance has been responsible for price rises.
Of course it's land values that make house prices expensive in the UK, not the bricks, it just needs the planning laws to be changed as only 6% of the UK has houses built on, not very different from land used as golf courses in the south

Every 20 year old kid would like a Ferrari, few can have one as they don't have access to the money.
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  #62  
Old 23.02.2015, 17:04
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Re: Proposed Capital Gains Tax on UK property for expats

hi, can anyone advise on my situation?
In march 2013 I moved to germany (yes I know! but the topic was relevant) on a 2 year career break, my wife had a two year contract which stared Jan 2013 -now extended.
We have a primary residence in UK purchased in 2001. we rented after leaving since it was forseen as 2 year break. We decided to stay permanently last summer and put our uk house on the market so we could buy one here. The tenant moved out when we put it on the market. We accepted an offer but it fell through. We have accepted another offer and are hoping it will complete before april 2015.

If it drags on after april 2015, will we be screwed for capital gains tax on our uk primary residence we are selling to buy a primary residence here?
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  #63  
Old 23.02.2015, 18:09
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Re: Proposed Capital Gains Tax on UK property for expats

wow, I didn't even know that I would be exempt from CGT anyway (in a year and a half).
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  #64  
Old 23.02.2015, 18:26
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Re: Proposed Capital Gains Tax on UK property for expats

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wow, I didn't even know that I would be exempt from CGT anyway (in a year and a half).
Not for long...
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  #65  
Old 23.02.2015, 18:38
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Re: Proposed Capital Gains Tax on UK property for expats

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hi, can anyone advise on my situation?
In march 2013 I moved to germany (yes I know! but the topic was relevant) on a 2 year career break, my wife had a two year contract which stared Jan 2013 -now extended.
We have a primary residence in UK purchased in 2001. we rented after leaving since it was forseen as 2 year break. We decided to stay permanently last summer and put our uk house on the market so we could buy one here. The tenant moved out when we put it on the market. We accepted an offer but it fell through. We have accepted another offer and are hoping it will complete before april 2015.

If it drags on after april 2015, will we be screwed for capital gains tax on our uk primary residence we are selling to buy a primary residence here?
You will only be liable for CGT on the increase in value after April 2015. http://www.out-law.com/en/articles/2...nt-homeowners/
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  #66  
Old 23.02.2015, 21:01
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Re: Proposed Capital Gains Tax on UK property for expats

Lots seem to be assuming a valuation as of April 2015 will be used to determine the "gains arising from [April 2015]".

However, I'd be surprised if this didn't use a similar mechanism to partial private residence relief, where the total gain is simply multiplied by the fraction of the relevant time period.

From HMRC's documentation of partial private residence relief:

Quote:
When calculating the proportion of the gain
eligible for relief, you multiply the gain by a fraction equal to the periods
of occupation (including the final 36 months where appropriate) divided
by the period of ownership [...]. You do not introduce valuations of the
property at the dates of changes of use.
To take an example of how I expect CGT on non residents to work, then:

A house bought in April 2006 for 350k is sold by a non resident in April 2015 for 500k. No CGT payable.

If the same house is instead sold by the non-resident in April 2017 for the same amount, 500k, the calculation is as follows. 150k total gain. Fraction occurring after April 2015 is 2/14, so taxable amount of gain is 21.4k. Then knock off the CG allowance (say 11k) and apply the CGT rate depending on band (say 18%), giving a total bill of around 1.9k. Not much.

So the effect comes in gradually, and you need a fairly large gain for it to matter within the first couple of years, given the CGT allowance. Thus, for most people, April 2015 is not a sharp cut-off date, but is a good time to get moving if you don't want higher and higher fractions of the gain to become taxable as time goes on.
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  #67  
Old 23.02.2015, 21:28
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Re: Proposed Capital Gains Tax on UK property for expats

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If it drags on after april 2015, will we be screwed for capital gains tax on our uk primary residence we are selling to buy a primary residence here?
Capital gains tax is based on the day of exchange of contracts & has nothing to do with completion, it's identical with shares etc.

[QUOTE=armed_neutrality;2346468]Lots seem to be assuming a valuation as of April 2015 will be used to determine the "gains arising from [April 2015]".

However, I'd be surprised if this didn't use a similar mechanism to partial private residence relief, where the total gain is simply multiplied by the fraction of the relevant time period.

From HMRC's documentation of partial private residence relief:



To take an example of how I expect CGT on non residents to work, then:

A house bought in April 2006 for 350k is sold by a non resident in April 2015 for 500k. No CGT payable.

I suspect you won't get a CGT allowance of 11k, just like you will no longer get the personal allowance after April 5 2015.
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  #68  
Old 23.02.2015, 21:51
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Re: Proposed Capital Gains Tax on UK property for expats

Your quoting needs fixing up in the above, but to respond to this point:

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I suspect you won't get a CGT allowance of 11k, just like you will no longer get the personal allowance after April 5 2015.
The consultation is clear on that:

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The annual exempt amount, currently £10,900, is
available to all individual UK taxpayers. The government intends that the annual exempt amount
will also be available to non-resident individuals subject to UK capital gains tax.
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  #69  
Old 03.11.2015, 10:44
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Re: Proposed Capital Gains Tax on UK property for expats

so has anyone actually been through the process now its live and got any updates on what they were actually billed for?


I'm contemplating selling next year so keen to hear how it went ...
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  #70  
Old 03.11.2015, 10:54
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Re: Proposed Capital Gains Tax on UK property for expats

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so has anyone actually been through the process now its live and got any updates on what they were actually billed for?


I'm contemplating selling next year so keen to hear how it went ...
You need to get a value for CGT purposes dated 5th April 2015, which is your base value. If you sell above that figure after expenses then your gain will be taxable.

Currently the CGT exemption is £11,000, then your taxed at 18% or 28%, depending on your UK earnings. (Below £31785 taxed at 18%). If your already a UK higher rate tax payer then all at 28%.

The revenue may look at the valuation with interest if it's higher than they believe it should be. Capital losses on disposal can be carried forward.

No one will have paid to date in this exact scenario as you don't do a tax return for the current tax year till end 2016.

CGT / Income tax allowances are still in tact, probably till April 2017.
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  #71  
Old 03.11.2015, 20:32
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Re: Proposed Capital Gains Tax on UK property for expats

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...then your taxed at 18% or 28%, depending on your UK earnings...
...and the amount of gain...

From https://www.gov.uk/capital-gains-tax...gains-tax-rate

"You’ll either pay 18% or 28% tax on your gains if you’re a basic rate taxpayer. How much you pay depends on the size of your gain and taxable income.
- Work out how much taxable income you have - deduct your Personal Allowance and any other Income Tax reliefs you’re entitled to.
- Work out your total taxable gains.
- Deduct your tax-free allowance from your total taxable gains.
- Add this amount to your taxable income.
- If this amount is less than the basic Income Tax band (£31,785 for the 2015 to 2016 tax year) you’ll pay 18% Capital Gains Tax. You’ll pay 28% on any amount above this."
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  #72  
Old 03.11.2015, 20:44
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Re: Proposed Capital Gains Tax on UK property for expats

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...and the amount of gain...

From https://www.gov.uk/capital-gains-tax...gains-tax-rate

"You’ll either pay 18% or 28% tax on your gains if you’re a basic rate taxpayer. How much you pay depends on the size of your gain and taxable income.
- Work out how much taxable income you have - deduct your Personal Allowance and any other Income Tax reliefs you’re entitled to.
- Work out your total taxable gains.
- Deduct your tax-free allowance from your total taxable gains.
- Add this amount to your taxable income.
- If this amount is less than the basic Income Tax band (£31,785 for the 2015 to 2016 tax year) you’ll pay 18% Capital Gains Tax. You’ll pay 28% on any amount above this."
In addition Old or current capital losses can be used to offset the gain. Even through there is no CGT charged on the sale of a main residence in the UK, any loss made in the past can be carried forward.

The date of exchange of contracts is the date used for disposal, rather than the completion date. This is important to know as you may have to pay the tax a year earlier than expected.
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  #73  
Old 28.11.2015, 17:18
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Re: Proposed Capital Gains Tax on UK property for expats

I have been out of the UK for 7 years and a non resident but bought an apartment 10 years ago, if i move back to the uk and sell it in a year or 2 will i be liable for capital gains tax for the gains arising over the last 10 years or only from April 2015?
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  #74  
Old 28.11.2015, 17:26
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Re: Proposed Capital Gains Tax on UK property for expats

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I have been out of the UK for 7 years and a non resident but bought an apartment 10 years ago, if i move back to the uk and sell it in a year or 2 will i be liable for capital gains tax for the gains arising over the last 10 years or only from April 2015?
https://www.gov.uk/government/public...sidence-relief
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Old 28.11.2015, 18:00
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Re: Proposed Capital Gains Tax on UK property for expats

The home will not become a private residence when i get back. Will periods of absence be exempt?
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  #76  
Old 28.11.2015, 18:07
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Re: Proposed Capital Gains Tax on UK property for expats

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The home will not become a private residence when i get back. Will periods of absence be exempt?
You will get taxed on gains from April 2015 to when you sell property.
If you are non UK resident and you spend more than 90 nights in the property then that year is exempt from gain.

We are returning to UK in 2016 September and when we sell house any gains from April 2015 to April 2016 will be liable to tax (minus £22K capital gains tax (£11K each) allowance).
For period April 2016 to April 2017 we will in property for more than 90 nights that tax year.
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  #77  
Old 28.11.2015, 18:11
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Re: Proposed Capital Gains Tax on UK property for expats

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The home will not become a private residence when i get back. Will periods of absence be exempt?
Probably not, in any case you have no idea what the tax law will be when you sell it.

If I were you I would crystallise the gain whilst still a Swiss resident, then you will only have the last years gains to worry about. With 11k CGT allowance & probably the rest of the gain would be taxable at only 18%. If you sell at a later date when working in the UK the gain will be likely taxed at 28%
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You will get taxed on gains from April 2015 to when you sell property.
If you are non UK resident and you spend more than 90 nights in the property then that year is exempt from gain.

We are returning to UK in 2016 September and when we sell house any gains from April 2015 to April 2016 will be liable to tax (minus £22K capital gains tax (£11K each) allowance).
For period April 2016 to April 2017 we will in property for more than 90 nights that tax year.
It's not clear if the property was subject to CGT or a main home before leaving for CH. If it was an investment property then you need to be away for 5 full tax years not to be liable to CGT on your return.

If your are non resident & you spend more than 90 days in the UK there is a good chance that you are also a UK resident. I do not know where this exemption comes from, unlikely to be accurate. You have returned so are UK resident from April 2016 so exempt if it's your main residence.
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  #78  
Old 28.11.2015, 18:12
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Re: Proposed Capital Gains Tax on UK property for expats

The tax was introduced to combat unfairness in the system.
A uk resident who owned two property;
House they elect to be main residence is capital gains tax free.
Second property is liable to CGT when they sell it.
However a Chinese billionaire could buy 10 houses in Mayfair, keep them for 5 years and then sell then and make a £100 million gain and pay no tax.
So thus new rules were bought in.
No brainerfor the government.
Collect more tax from people who can't vote :-)
Also control overseas investors distorting house prices via demand.
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  #79  
Old 28.11.2015, 18:21
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Re: Proposed Capital Gains Tax on UK property for expats

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The tax was introduced to combat unfairness in the system.
A uk resident who owned two property;
House they elect to be main residence is capital gains tax free.
Second property is liable to CGT when they sell it.
However a Chinese billionaire could buy 10 houses in Mayfair, keep them for 5 years and then sell then and make a £100 million gain and pay no tax.
So thus new rules were bought in.
No brainerfor the government.
Collect more tax from people who can't vote :-)
Also control overseas investors distorting house prices via demand.
The unfairness in the system is that homeowners are not subject to CGT....... All other personal investments are subject to CGT unless in an ISA.
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Old 28.11.2015, 18:37
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Re: Proposed Capital Gains Tax on UK property for expats

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The unfairness in the system is that homeowners are not subject to CGT....... All other personal investments are subject to CGT unless in an ISA.
Yes that would be a vote winner
I will suggest it to the Raving Loony Party , they are the only political party I could see championing that as a policy.
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