Tax on overseas property when moving back to UK
Nov 4th 2017, 1:06 pm
#1
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Tax on overseas property when moving back to UK
Great website!
Can't find if this question has been asked before.
I am thinking of buying a property in the UK and returning to the UK permanently having lived abroad outside the EU for many years. The house in the UK therefore will become my permanent residence. I own a house in the country where I presently live, but do not want to sell it; I am leaving it for my (adult) children to live in. There will be no income from the house; that is, I am not charging my children rent nor renting any rooms to others.
Do I have to declare the overseas house to the UK tax office and/or pay tax on it?
Many thanks.
Can't find if this question has been asked before.
I am thinking of buying a property in the UK and returning to the UK permanently having lived abroad outside the EU for many years. The house in the UK therefore will become my permanent residence. I own a house in the country where I presently live, but do not want to sell it; I am leaving it for my (adult) children to live in. There will be no income from the house; that is, I am not charging my children rent nor renting any rooms to others.
Do I have to declare the overseas house to the UK tax office and/or pay tax on it?
Many thanks.
Nov 4th 2017, 2:31 pm
#2
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Re: Tax on overseas property when moving back to UK
I would think that as a UK resident you would have to declare your other house although any taxes on it would happen when you die and it is counted in your estate for taxation.
I would also think that buying a house in the UK will be more expensive since the stamp duty is higher when buying a 2nd house. This happened to my sister recently.
https://www.theguardian.com/money/20...e_iOSApp_Other
It also applies to houses owned overseas
https://www.primelocation.com/discov...qYbmpzX81bY.97
I would also think that buying a house in the UK will be more expensive since the stamp duty is higher when buying a 2nd house. This happened to my sister recently.
https://www.theguardian.com/money/20...e_iOSApp_Other
It also applies to houses owned overseas
https://www.primelocation.com/discov...qYbmpzX81bY.97
What if the home I already own is abroad?
You're liable to pay the 3% surcharge even if the home you already own (or part-own) is abroad. So, if you have a holiday apartment in Spain and are buying your first home in the UK, you’ll have to pay the 3% additional tax
You're liable to pay the 3% surcharge even if the home you already own (or part-own) is abroad. So, if you have a holiday apartment in Spain and are buying your first home in the UK, you’ll have to pay the 3% additional tax
Last edited by durham_lad; Nov 4th 2017 at 2:36 pm.
Nov 6th 2017, 8:48 am
#3
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Re: Tax on overseas property when moving back to UK
Thanks, durham_lad
I have read those links carefully and looked at other sites. Sadly, it definitely seems to be the case that I will have to pay the additional 3% on the UK property purchase. Damn!
However, it is possible to reclaim the 3% back if I dispose of my overseas property within 36 months, so that's something. On the other hand, I guess I will be hit then with Capital Gains Tax, which seems grossly unfair.
I have read those links carefully and looked at other sites. Sadly, it definitely seems to be the case that I will have to pay the additional 3% on the UK property purchase. Damn!
However, it is possible to reclaim the 3% back if I dispose of my overseas property within 36 months, so that's something. On the other hand, I guess I will be hit then with Capital Gains Tax, which seems grossly unfair.
Nov 6th 2017, 9:27 pm
#4
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Joined: Aug 2013
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Posts: 4,131
Re: Tax on overseas property when moving back to UK
Thanks, durham_lad
I have read those links carefully and looked at other sites. Sadly, it definitely seems to be the case that I will have to pay the additional 3% on the UK property purchase. Damn!
However, it is possible to reclaim the 3% back if I dispose of my overseas property within 36 months, so that's something. On the other hand, I guess I will be hit then with Capital Gains Tax, which seems grossly unfair.
I have read those links carefully and looked at other sites. Sadly, it definitely seems to be the case that I will have to pay the additional 3% on the UK property purchase. Damn!
However, it is possible to reclaim the 3% back if I dispose of my overseas property within 36 months, so that's something. On the other hand, I guess I will be hit then with Capital Gains Tax, which seems grossly unfair.
I am discovering that now as I do my UK taxes because I sold a bunch of shares to buy our house earlier this year, and those shares were purchased when the £ was at $1.60.
Nov 7th 2017, 6:17 am
#5
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Re: Tax on overseas property when moving back to UK
Those capital gains could be very large given the fall of the £ against the $ since you will have to use historical rates to calculate how much the house cost in £ when you purchased it and then the exchange rate on the day of the sale to calculate the proceeds in £.
I am discovering that now as I do my UK taxes because I sold a bunch of shares to buy our house earlier this year, and those shares were purchased when the £ was at $1.60.
I am discovering that now as I do my UK taxes because I sold a bunch of shares to buy our house earlier this year, and those shares were purchased when the £ was at $1.60.
Think I won't bother to sell my overseas property.
Is the British government determined to make it difficult for its true-born to return?
Nov 7th 2017, 7:25 am
#6
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Re: Tax on overseas property when moving back to UK
With the equivalent in the UK, ISAs, the IRS taxes the interest as it happens and even stocks and shares funds inside ISAs are not just taxed but treated as PFICs.
Nov 11th 2017, 2:26 am
#7
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Re: Tax on overseas property when moving back to UK
HMRC are pussycats compared to the IRS. For example if something is not taxed in the US such as Roth IRA distributions then it is not taxed in the UK and HMRC respects the pension wrapper around Roth and traditional IRAs.
With the equivalent in the UK, ISAs, the IRS taxes the interest as it happens and even stocks and shares funds inside ISAs are not just taxed but treated as PFICs.
With the equivalent in the UK, ISAs, the IRS taxes the interest as it happens and even stocks and shares funds inside ISAs are not just taxed but treated as PFICs.
Nov 13th 2017, 8:47 am
#8
womble
Joined: Sep 2005
Posts: 2,675
Re: Tax on overseas property when moving back to UK
Lots of us in this situation.
We bought in NL to live there but then moved overseas and rented it outwith view of returning but never did. Can’t sell as tenants are protected.
Anything we buy in the UK now will be extra taxed.
NL doesn’t have capital gains tax, but Dutch housing market hasn’t seen much gains over 15+ years - buggers keep building to meet demand 🤣
Hoping for a budget change in November from Tory govt.
We bought in NL to live there but then moved overseas and rented it outwith view of returning but never did. Can’t sell as tenants are protected.
Anything we buy in the UK now will be extra taxed.
NL doesn’t have capital gains tax, but Dutch housing market hasn’t seen much gains over 15+ years - buggers keep building to meet demand 🤣
Hoping for a budget change in November from Tory govt.
