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Tips for Expats to Avoid Paying Maximum Capital Gains Tax (CGT)

Written by Posted On Tuesday, 07 March 2017 07:26
Tips for Expats to Avoid Paying Maximum Capital Gains Tax (CGT)

Britons Overseas are legally subject to CGT while selling out their UK properties, and when this news is aired across UK, there are many individuals seeking out for the legitimate way to minimize its impact. If you are also the one, here is a complete guide on escaping the larger impact of CGT (capital gains tax).

Expats who possess a flat or house in Britain on their name now should get more alert and must act right away to evade being throbbed by a hefty capital gains tax bill in the near future.

Ever since the commencement of the tax year on April 6, the new legislation has applied which will imply tax on the profit made on the residential property sold by the folks living outside the UK. Before the new law of CGT was applied, it was quite easy for the expats to sell their property in UK despite of being outside their region but now it’s tough.

As the profit is determined just to boost in the property value from April 6 2015, you still have a chance to reduce the size of your future CGT bill. In order to do that, you just need to get it separately valued by an eligible chartered surveyor or a local estate agent as close to this date as possible even if you are not selling it in near future.

It will great for you to get it in two valuations. It they vary extensively, you can get the third & pick the one in middle. As the valuations will be in writing form, keep them secure with you, in case the tax man asks for them after the property is sold. Bear it in mind that, you will be charged a fee by surveyors where the estate agents valuations are comparatively free.

If you don’t get a proper valuation straightaway, you may have to pay even more tax while selling your home in the near future. A Non-UK resident can also attempt to obtain a retrospective valuation but this will turn out to be even more complex, costly and time-consuming at the same time.

When you have to sell your property, you are required to fill out a Non-Resident Capital Gains Tax (NRCGT) return and must inform the HM revenue and customs within 30 days of completing the sales. You can find the form as well as information on the official HMRC website at

The exact amount to be paid in tax depends on the circulation whether you are a basic rate taxpayer or not. However the basic rate tax payers have earning up to £31,785 in 2015/16 will have to pay 18pc on any gain while the higher and additional rate taxpayers will pay 28pc CGT.

If you have previously bought any property in UK in the year 2005 for £250,000 valued at £500,000 in April 2015 sold for £600,000 two years later, you will have to pay CGT on the £100,000 it had amplified in price since April this year.

If expats want to pay no CGT, their property needs to be classed as their principal private residence (PPR) for the tax purposes. Expats need to stay in UK for at least 90 days in a year and must also be counted as the UK taxpaying resident. Alternatively, they can also come back to UK and stay in the residential rental property before selling it. It would provide them with the partial PPR relief.

If you need more details on capital gains tax, consult to an experienced tax adviser who possesses specialization in expats’ affairs. 

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Amaya Bell

Amaya Bell is an experienced writer who loves to write on different topics such as Real Estate, Travel tips, tips for how to find perfect flats for rent in london

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