If you’ve stopped dreaming about getting a new life and are about to do something about it and emigrate, you might want to sell your UK home before you go!
You see, the UK doesn’t charge its residents Capital Gains Tax (or CGT) on any profits they make from the sale of their main residence.
But if you’re planning on selling your UK home after taking up residence in your new country, any capital gains you make could be subject to taxation in your new country.
Most UK double taxation treaties allow for CGT charges to be made by the new country of residence rather than the UK you see, and so you might suddenly become liable for taxation on the gains from the sale of your UK former home.
In fact many countries charge their residents capital gains tax on all gains made from all worldwide disposals.
If it’s too late and such a situation is about to arise for you then identify whether the UK has a double tax treaty with your new country.
If it does, under the terms of some of the double taxation treaties ‘immovable property’ can still be taxed in the country where the property is located - so in this particular scenario the house is definitely ‘immovable’ and so it could be taxed in the UK after all.
And this is better?
Yes - this would mean that there would be no overseas CGT liability because the property is physically located in the UK, AND no UK CGT liability either…so long as ‘the five year rule’ was adhered to.
What’s the five year rule?
So long as you don’t become a UK resident again for the next five tax years after your departure date from the UK, you’ll avoid capital gains tax in this instance.
But as always, seek professional advice as your own personal circumstances are unique.
And if you need help to sell you house try the following
Selling Houses: How to Sell Your House as Quickly as You Can for as Much Money as You Can
Anthea Masey, Andrew Winter
Synopsis
“Selling Houses” is the Channel 4 series in which estate agent Andrew Winter transforms apparently impossible-to-sell houses and finds a buyer for them within three weeks of the transformation.
This practical and well-illustrated guide gives readers the know-how and estate agent’s inside knowledge to help them turn their house into a buyer’s dream.
It takes them through the entire process from the basic principles of knowing the buyer, knowing the competition and making the best of their homes, through detailed room-by-room advice including projects for a range of budgets.
Drawing on case studies from both series and around the country, it includes everything a vendor needs to get that stubborn For Sale sign down and the Sold sign up.
Click here to order a copy directly from Amazon!
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