Changes to capital gains tax
As landlords, we understand tax may be payable if we make a profit when selling residential property in the UK. However, if you are a landlord living overseas, this has not been the case, until recently.
The Government has closed a tax loophole for overseas residents who will pay capital gains tax for the first time from April 6, 2015 when they sell a home in the UK. Until that date, many buy to let portfolio owners had an exit strategy from their business by moving abroad to release the cash in their homes without paying capital gains tax (CGT) – while landlords in the UK continued to do so.
If you live abroad for 6 months or more each year, you are classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) – even if you are a UK resident for tax purposes. If this applies to you, there is a danger you could pay more CGT than necessary when your property is eventually sold.
Property values were rebased on April 6, 2015. Instead of putting in the purchase price, the open market value on April 6, 2015 will now be used to calculate any chargeable gain. Therefore, it’s vital to get an up-to-date valuation of your property now, even if you have no intention of selling.
Currently Capital Gains Tax rates are 18% and 28% depending on your circumstances and a retrospective estimate of your property’s value could result in you paying more tax than you should when you decide to sell in the future.
If you would like us to arrange for a valuation of your property then please contact our Residential Sales department today.
Crystal joined Pace in 2007 and was appointed to her current role of Managing Director in 2010, heading up the company founded by her father in 1994.
She is responsible for the daily operations of the business, whilst also ensuring the company is financially sound, has strategic direction and is planning for future growth.
Crystal takes a thoughtful and considered approach to all that she does, transferring her determination to deliver implicit care, attention and professionalism to every member of her team.
Pace employ 20 full time staff. Meet the key team members here.
