Discover how CGT rules apply to expats when selling property in the UK

The rule used to be that as long as you had been non-UK resident for five consecutive tax years, then you would not be taxed on any gains made when you sold UK property.

However, as of 6th April 2015, that ceased to be the case.

Now, if you are a British expat or non-resident who owns property in the UK, you will need to pay Capital Gains Tax (CGT) if you sell your property for a gain. It doesn’t matter how long you have lived outside the UK or even if you never intend to return, the taxman still wants his cut.

How is the tax calculated?

In most cases, you will be able to rebase the value of your property to the 5th of April 2015.

You will then pay tax in the same way as UK residents do. I.e. the net gain (on post 5th April 2015 valuation) less your annual allowance (GBP12,000 in tax year 2019/2020) is added to any other UK income for the tax year in question.

This amount is then taxed at either 18% or 28% depending on whether you fall into the basic or higher-rate tax bracket.

Useful link – HMRC provide this handy site for calculating non-resident capital gains tax on property.

Can it be avoided?

If you lived in the property for 90 days or more in the year in which you sold it, you would meet the conditions for private residence relief (PPR). In this case, you wouldn’t have to pay CGT.

Be careful with this however, as it may push you into a different residence category for tax according to the UK’s Statutory Residence Test. This could have have serious implications on your overall tax position.

How do I report the gain and when is the tax payable?

Firstly, If you are a non-resident and have sold property in the UK, you need to tell HM Revenue and Customs (HMRC) within 30 days, even if you have no tax to pay.

You are also required to pay any non-resident Capital Gains Tax due within the same 30 day period, although there are exceptions to this rule if you already have an existing relationship with HMRC – e.g. through Self Assessment.

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