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  #81  
Old 28.11.2015, 19:18
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Re: Proposed Capital Gains Tax on UK property for expats

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Not for long...
On any gain unto April 2015, with the changes on BTL mortgage interest taxation plus higher stamp duty. It would would not surprise me if property prices fall significantly. It was the end of MIRAS for 2 borrowers that caused the last UK property crash. Like this time plenty of warning on the tax change was given......
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  #82  
Old 02.05.2016, 21:30
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Re: Proposed Capital Gains Tax on UK property for expats

Hello everyone


So Im the first candidate and have to fill out a poxy 10 page web page on the HMRC to declare my CGT which you have to file within 30 days of completion. Link here


Using the straight-line method (difference between purchase price / sold price, divide by numbers of years owned, then by x number of years after the CGT started (April 2015)


I worked out that were liable for 22.4K (11.2K shared between Mrs & me)


Initially I was worried that I might have to pay a few Ks given weve been renting the house out which would take us 8K over the 10.9K allowance, however, given the completion date was the 18th April, that means it rolls into the 2016/2017 tax year resetting my 10.900 allowance


I guess that means with my personal allowance @10.900 I will be taxed 500 @ 18% = 90


Sound right?
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  #83  
Old 02.05.2016, 21:54
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Re: Proposed Capital Gains Tax on UK property for expats

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Hello everyone


So Im the first candidate and have to fill out a poxy 10 page web page on the HMRC to declare my CGT which you have to file within 30 days of completion. Link here


Using the straight-line method (difference between purchase price / sold price, divide by numbers of years owned, then by x number of years after the CGT started (April 2015)


I worked out that were liable for 22.4K (11.2K shared between Mrs & me)


Initially I was worried that I might have to pay a few Ks given weve been renting the house out which would take us 8K over the 10.9K allowance, however, given the completion date was the 18th April, that means it rolls into the 2016/2017 tax year resetting my 10.900 allowance


I guess that means with my personal allowance @10.900 I will be taxed 500 @ 18% = 90


Sound right?
Excuse me for being stupid;
Isn't it your capital gains allowance that allows you some of the gain tax free, rather than personal tax allowance ?
Capital gains allowance would not be impacted by any uk income such as rent the same year ?
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  #84  
Old 02.05.2016, 22:02
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Re: Proposed Capital Gains Tax on UK property for expats

Thanks for posting a link to the 10 page form.
So if I purchased a house in Feb 2003.
Was in Switzerland from September 2013 until October 2016.
Return to uk for good.
Sell house for completion post 6th April 2017.
I presume I don't need to complete the form ?

It says only if you were non resident in year of sale or split year (away in part of year when you sold property).
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  #85  
Old 02.05.2016, 23:10
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Re: Proposed Capital Gains Tax on UK property for expats

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Hello everyone


So I’m the first candidate and have to fill out a poxy 10 page web page on the HMRC to declare my CGT – which you have to file within 30 days of completion. Link here


Using the straight-line method (difference between purchase price / sold price, divide by numbers of years owned, then by x number of years after the CGT started (April 2015)


I worked out that we’re liable for 22.4K (11.2K shared between Mrs & me)


Initially I was worried that I might have to pay a few K’s given we’ve been renting the house out which would take us 8K over the 10.9K allowance, however, given the completion date was the 18th April, that means it rolls into the 2016/2017 tax year resetting my 10.900 allowance


I guess that means with my personal allowance @10.900 I will be taxed 500 @ 18% = 90


Sound right?
Your capital gains allowance is 11,100 each if I'm correct.
So jointly you can gain 22,200 in tax year prior to being taxed at either 18 or 28% depending if you are a low or higher rate tax payer in uk at time of gain.

I work it out as 18 tax owed each or 36 joint.

Also assume you have never lived in the property as your main prime residence prior to April 2015 ?
If you did , them you get 18 months relief post April 2015 (you sell prior to October 2016).
In this case you will pay zero capital gains tax.

Last edited by Ravenk; 02.05.2016 at 23:22.
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  #86  
Old 03.05.2016, 08:54
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Re: Proposed Capital Gains Tax on UK property for expats

Yes correct not lived in the property.

Thanks a lot for the reply.
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Old 03.05.2016, 09:51
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Re: Proposed Capital Gains Tax on UK property for expats

Not sure if your calculation is correct...and I didn't spend much time looking at this, but from top of my head...

When you calculate the gain (sold price - purchase price - sales costs), I believe the purchase price should not be your actual purchase price, but the fair market value at April 2015 when the rules changed (this can be a point of contention if you did not have it valued at the time). Your years of ownership would start from that point. However, I'm not sure why that is relevant as I thought taper relief was abolished. What did you base your calculation on ?

Secondly, when calculating CGT it applies only on the gain minus the CGT allowance, but the rate at which you pay will depend on your taxable earnings for the year including that gain.

Probably not relevant in your case, assuming you have very low UK taxable earnings, but assuming you have separately taxable earnings, i think it goes like this...

e.g. you earned 5k income, but wife earned 30k income (subject to UK tax). You made 50k on the sale (50% =25k to each). So to determine the tax rate you add 25k each to your earnings = 30k and 55k respectively. You would be taxed at 18% and the wife at 28%. The amount you are taxed on at that rate would be 25k - CGT 11k allowance = 14k. So you pay 18%*14k and wife 28%*14k.
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  #88  
Old 03.05.2016, 12:23
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Re: Proposed Capital Gains Tax on UK property for expats

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Hello everyone


So Im the first candidate and have to fill out a poxy 10 page web page on the HMRC to declare my CGT which you have to file within 30 days of completion. Link here


Using the straight-line method (difference between purchase price / sold price, divide by numbers of years owned, then by x number of years after the CGT started (April 2015)


I worked out that were liable for 22.4K (11.2K shared between Mrs & me)


Initially I was worried that I might have to pay a few Ks given weve been renting the house out which would take us 8K over the 10.9K allowance, however, given the completion date was the 18th April, that means it rolls into the 2016/2017 tax year resetting my 10.900 allowance


I guess that means with my personal allowance @10.900 I will be taxed 500 @ 18% = 90


Sound right?
CGT is based on CONTRACT date, nothing to do with completion or collecting money.
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  #89  
Old 03.05.2016, 12:37
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Re: Proposed Capital Gains Tax on UK property for expats

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CGT is based on CONTRACT date, nothing to do with completion or collecting money.
The form sates:
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Please note: You must notify HM Revenue and Customs (HMRC) 30 days from the date the property is conveyed and confirm payment details. Failure to notify HMRC and pay on time may result in penalties and interest.
I assume "notify" means fill in the form and "conveyed" means completion.

The gaping hole in the UK system is that if you complete, get your money and ship it out here, how will they ever collect? It seems HMRC are using self-assessment for this too.

In the Swiss system the local tax office works hand in hand with the Grundbuchamt (Land Registry) and you cannot transfer a property without agreement from the tax office that a charge for CGT has been raised - even if your liability is zero...
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  #90  
Old 03.05.2016, 13:31
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Re: Proposed Capital Gains Tax on UK property for expats

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The form sates:

I assume "notify" means fill in the form and "conveyed" means completion.

The gaping hole in the UK system is that if you complete, get your money and ship it out here, how will they ever collect? It seems HMRC are using self-assessment for this too.

In the Swiss system the local tax office works hand in hand with the Grundbuchamt (Land Registry) and you cannot transfer a property without agreement from the tax office that a charge for CGT has been raised - even if your liability is zero...
Notify, however the tax calculation is based on contract date. I know someone who did major building works & moved in 11.5 months after completion. At a later date he had a tax investigation & ended up paying some CGT on the sale of his main home because he did not move in within a year of purchase.

All UK tax is self assessment, fines & interest can exceed the tax payable..... the statute of limitations on tax evasion is 20 years in the UK, they can still come after you in CH.
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Old 03.05.2016, 14:09
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Re: Proposed Capital Gains Tax on UK property for expats

I'm not sure I fully understand the ins and outs here, but to my mind this seems entirely the wrong thing to be doing as it provides a disincentive to someone looking to sell an unoccupied property at a time when there are gross shortages and many are expecting to be priced out of the market until their 40s.

If a tax is to be introduced on unoccupied properties, surely it should be set up to discourage sitting on UK properties from abroad and leaving them empty for most of the year to the detriment of those in need of a place to live in the UK.
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  #92  
Old 03.05.2016, 14:22
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Re: Proposed Capital Gains Tax on UK property for expats

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CGT is based on CONTRACT date, nothing to do with completion or collecting money.


Contract date as in what I would call "when we exchanged" as in we've exchanges contracts - which in my case was less than a week.
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Old 03.05.2016, 14:29
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Re: Proposed Capital Gains Tax on UK property for expats

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I'm not sure I fully understand the ins and outs here, but to my mind this seems entirely the wrong thing to be doing as it provides a disincentive to someone looking to sell an unoccupied property at a time when there are gross shortages and many are expecting to be priced out of the market until their 40s.

If a tax is to be introduced on unoccupied properties, surely it should be set up to discourage sitting on UK properties from abroad and leaving them empty for most of the year to the detriment of those in need of a place to live in the UK.
Perhaps when prices fall & there is no tax to pay, then first time buyers will be able to buy what they want.

Property can never remain unaffordable for more than 1 generation at the most.

Taxing land with planning permission but unbuilt on at the highest rate per house allowed would encourage available land to be used rather than banked. Opening up the green belt would solve the problem overnight with exiting properties falling to intrinsic value. This will happen when the majority of the electorate want to buy but can't afford to do so..
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Contract date as in what I would call "when we exchanged" as in we've exchanges contracts - which in my case was less than a week.
I have completed the same day as exchange, it can be any day but often 1 month, much longer with a new build.
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Old 05.05.2016, 12:39
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Re: Proposed Capital Gains Tax on UK property for expats

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When you calculate the gain (sold price - purchase price - sales costs), I believe the purchase price should not be your actual purchase price, but the fair market value at April 2015 when the rules changed (this can be a point of contention if you did not have it valued at the time). Your years of ownership would start from that point.
Yes - you only pay tax on the increase in value from April 2015. We got a written valuation done last April for exactly this reason as the price doubled in 2 years (on paper). We also sold another before the tax kicked in.

That was a sweet deal foreign investors had for a while there with no CGT. Next they are going to disallow mortgage interest deductions. Mortgages are usually only 25 years there, so they do get paid off.
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Old 05.05.2016, 21:47
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Re: Proposed Capital Gains Tax on UK property for expats

There are three ways which you are allowed to calculate the gains of a property


There are 3 ways to calculate your gain or loss:
1) using the market value at 5 April 2015

2) by working out the gain over the whole period (date property was acquired to date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion - known as time apportionment

3) by working out the gain over the whole period

iMO
1) is vague as hell and unless you have a written valuation from 3 agents in my view doesn't really hold water

2/3) makes more sense as its transparent.

I suppose people will pick and choose which is advantageous to their own situation.
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Old 05.05.2016, 23:27
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Re: Proposed Capital Gains Tax on UK property for expats

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1) using the market value at 5 April 2015

2) by working out the gain over the whole period (date property was acquired to date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion - known as time apportionment

3) by working out the gain over the whole period
If you can't do 1) without a valuation at April 2015, the same surely applies to 2) ?
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  #97  
Old 06.05.2016, 01:12
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Re: Proposed Capital Gains Tax on UK property for expats

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If you can't do 1) without a valuation at April 2015, the same surely applies to 2) ?
No really. You have the bought price and the sold price. These are logged by the solicitor.
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  #98  
Old 06.05.2016, 08:40
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Re: Proposed Capital Gains Tax on UK property for expats

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2) by working out the gain over the whole period (date property was acquired to date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion - known as time apportionment
Should have highlighted first time maybe...for this you need a valuation at 5 Aptil 2015....
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  #99  
Old 12.12.2017, 12:37
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Re: Proposed Capital Gains Tax on UK property for expats

I've just found out a CGT calculator for Non-residents selling property back in UK. It's quite straight forward and easy to use. Check it out:-

https://www.tax.service.gov.uk/calcu.../non-resident/
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Old 12.12.2017, 12:54
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Re: Proposed Capital Gains Tax on UK property for expats

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I've just found out a CGT calculator for Non-residents selling property back in UK. It's quite straight forward and easy to use. Check it out:-

https://www.tax.service.gov.uk/calcu.../non-resident/
It asks for the date of signing contracts so it's definitely date of exchange of contracts & not completion as I mentioned earlier in the thread
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