Did you know that selling a UK residential property while living abroad can trigger a capital gains tax (CGT) bill, even if you are a non-resident?
According to a recent survey conducted by Experts for Expats at the end of last year, 23% of British expats are considering selling their UK property, with the majority looking to use the equity to support their retirement.
However, the survey also highlighted that 61% aren’t aware that UK capital gains tax may be due or that a non-resident capital gains tax return must be filed.
In my experience, this is a fairly common issue.
Many expats sell their UK properties and become aware of their non-resident capital gains tax obligations too late.
As a result, they are subjected to late filing penalties and potentially incur unexpected tax liabilities.
This scenario is particularly prevalent among those expats who left the UK and moved abroad before 2015 when the new non-resident CGT rules were introduced.
Many are simply unaware of the changes.
You can find out more about how Capital Gains Tax on UK property is calculated for expats and how to report a gain here.
Don’t forget about the rules in your current country of residence
You also need to be careful to ensure that you report the sale of your UK property correctly in your current country of residence.
Otherwise, you may expose yourself to problems there too.
If there is tax payable locally, then you may be able to claim a credit for any UK tax payable reducing the overall tax due.
Conclusion
Selling a residential property as an expat is not the same as when you sell while living in the UK.
There are many potential factors to consider and seeking advice from a specialist can help ensure that everything goes smoothly.
