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Old Sep 27th 2017, 12:26 pm   #1
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Default As a non resident is it a smart move to purchase UK property now

Hello everyone,

Apologies if this is the wrong board but as my question is more uk centric as opposed to where I'm currently living it seems the best choice.

I'm from Manchester but now am resident in Japan (+10 years). My father (another non resident) and I are thinking about buying a property in cash between us back in Manchester (I still visit Manchester on a yearly basis)

We intend to rent the property out using a letting agent. We intend to keep hold of the house for the long term and I may in many years to come return to live in it.

However, Ive been learning how the government has started to make it less appealing for non residents to purchase residential property and not sure if this is a wise decision.

I know of the CGT 2015 rule change for non residents. Not done my maths yet on how that would impact us but since we dont have any UK sourced income it might not be so bad.

Apart from that are there any other things we should be aware of? Is buying a good idea as a non resident?
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Old Sep 27th 2017, 2:22 pm   #2
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Default Re: As a non resident is it a smart move to purchase UK property now

We had two properties on rent while we were non residents. We were very glad we did that as we now live in one and the other provides some income for us to live off. We have no regrets. We had a good agent which is important. You would probably have to pay higher fees for a well known agent but it is worth it. I have watched too many programs on landlords/tenants to risk using a smaller agency unless it comes well recommended. I can’t really say whether it is a good idea to buy now, given the unknown effects of Brexit but, depending on the area, hopefully the housing market will not go down too much.
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Old Sep 28th 2017, 12:01 pm   #3
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Default Re: As a non resident is it a smart move to purchase UK property now

Hello adamyokohama,

Following the changes to capital gains for UK Non-residents, a UK Non-resident owner who makes a disposal of a UK residential property is now required to file a Non-resident Capital Gains Tax Return (NRCGT) to HMRC with effect from the 2015/16 tax year.

The NRCGT is in addition to the annual Self Assessment Tax Return (SATR) with the deadline to file this being within 30 days of conveyance.

If the disposal is not reported within 30 days a late filing penalty will be issued and deferment of the payment of any capital gains tax due may not be granted and may become immediately payable.

If the interest in the residential property was held jointly, each individual must file a NRCGT separately notifying their own share.

The above also applies even if you have disposed of only part of an interest in a UK residential property and also if you are now UK resident but disposal took place in the overseas part of a split year.

Also, with effect from the current tax year (2017/18) HMRC will be restricting deductions from rental property income in relation to mortgage interest as follows:

2017/18 - 75%
2018/19 - 50%
2019/20 - 25%
2020/21 - 0% and beyond

The above will obviously also have a significant impact on rental profits and resulting tax liability.
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Disposing of UK residential property?
** HMRC Capital Gains Tax - New rules for UK non-residents effective 2015/16 - Now required to file new NRCGT return within 30 days to avoid penalty **
http://www.uktaxforexpats.com
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