EXPATS in Turkey and elsewhere who sell residential property in the UK could be exposed to hefty tax bills after new capital gains rules kicked in on April 6, the OverseasGuidesCompany.com team have warned.
“As of April 6, capital gains tax will be levied on non-UK residents who dispose of UK residential property, including trustees, certain companies and personal representatives,” said Elaine Ferguson, Head of Customer Service at OverseasGuidesCompany.com.
“From talking to the people we help to move abroad, we know that owning and letting a property in the UK is a popular way for expats to get income and keep hold of a Sterling asset.
“At some point, some decide to sell while still resident abroad and it is then that the new tax could hit them.”
She said:“Thanks to the new charge only being applicable to gains accruing after 6th April 2015, there is a way non-resident owners can minimise how much CGT they are liable for, which is to get an official valuation of their property now.
“Not doing so could mean capital gain is calculated as a portion of the total gain accrued during the whole period of ownership, potentially making the tax bill much higher.”
She said an alternative option when selling could be to try to obtain a retrospective valuation, but this would be a more complex, time-consuming and costly option.
Under the new CGT charge, the rates for individuals will be either 18 per cent or 28 per cent, according to their status as basic or higher/additional rate taxpayers respectively.
She said: “We always recommend speaking to a tax advisor who specialises in helping expats or those on the verge of moving overseas, as taking preventative measures early on can save money later on down the line.”