shelmer18

Hi all,

I'm currently living abroad (in China) and as I don't plan to move back to the UK for a few more years, I'm planning on selling my flat in the UK (which I'm currently renting) and using the money from this and my savings from working abroad to buy a more expensive place and again renting it out - as property prices seem to keep going up I don't want to get left behind (properties in my price range seem to keep going up by almost as much as I can save!).

Does anyone have any experience with how this works? Obviously I plan to go back to the UK to look for a place, but once I've found one and had an offer accepted is there anything else I physically need to be there for? (note: I have a family member in the UK with power of attorney). Or can everything else be done by email, telephone, post etc.?

Cheers!

spouse of scouse

We bought our UK house in exactly the way you describe - came over, chose a property and had an offer accepted, then completed the rest of the sale from Australia. No power of attorney was necessary.

The main thing is to choose a good solicitor to handle your purchase while you're in the UK. Once you've done this, and the solicitor verifies your identity, everything else can be done remotely. Don't forget you'll also need to organize a survey for the property you purchase, but even that can be done via email.

Bermudashorts

I have both sold and bought a property whilst living outside the UK. Completely straight forward, just couriered the necessary documents as required. I did not have a power of attorney and nor would I ever give anyone power of attorney over my affairs whilst I still possess my marbles.

Victor Meldrew

I also sold one property and bought another whilst in UAE.

We came over to UK to look at properties in the Summer and put an offer in on one after we had returned to UAE.

Most stuff can be done by 'sign, scan and email' followed up where necessary by couriered document.

We didn't use a solicitor or conveyancer but used an online conveyancing company called Premier Property Lawyers ( http://www.premierpropertylawyers.com/contact ) . At first I was a bit sceptical of using a company based nowhere near the house I was selling (North West) or the house I was buying (West Midlands). They are based in Leicester. However I was most impressed with how straightforward and efficient it was.

You are assigned your own conveyancer within the company and everything is tracked whereby you can sign in and view your case to see where things are up to, which are completed, which are pending etc. They were also very good at email correspondence. I would recommend them.

mariabc

We've been told if you've not personally been living in the property, you have to pay capital gains on the increased value. Even though it might be your 'primary' residence, you still have to pay as you're an expat. How would the inland revenue know this or is it something you have to declare? The tax due might be huge considering the increases in UK property.

Bermudashorts

If a property is being rented out, then obviously it cannot be a primary residence. What with somebody else living in it and all that.

The UK tax regime is largely self assessment and depends upon declaration to a large extent. But you just never know what might be looked at. Tax is only on profits though, we are taxed on profits and taxed on earnings, don't always understand why people are so reluctant to be taxed on increases on wealth that come form property.

Pulaski

Agree, I sold our house while living in the US. I don't recall couriering documents and so I think I gave my solicitor a limited POA to close the sale, on receipt of written instructions from me to do so - my estate agent ran everything through me, so the solicitor wouldn't know about the deal agreed for the sale until notified by me.

Ozzidoc

The tax rules are all about to change.
1.Mortgage interest will be a disallowed as an expense in the UK.
2. Income from property will be payable from the first dollar earned. ie no tax-free threshold. I believe this will be phased in.

There are several good podcasts about UK property. You can get interesting, relevant and new information easily and without much effort via listening to them. My current favourite includes one called something like "UK Investment Property News".

Bermudashorts

Neither your point 1) or 2) are correct.

Mortgage interest will be restricted to basic rate tax relief, so only effecting higher rate tax payers which would not generally capture expat landlords. I have no idea at all where you have heard that about personal allowance.

Ozzidoc

Thanks. I was unaware of it being "basic rate tax relief". I do however know expats who are affected by this.

I'll keep digging on the other points. Not that I don't believe you, but I wouldn't share the information if I hadn't heard it from several sources. But I have heard it and not looked at the official documentation.

Thanks again.

Bermudashorts

If an expat has a property empire to the extent that they fall into the higher tax bands then yes, their mortgage interest relief will be restricted, but it certainly is not gone altogether.

And the personal allowance is available to all British citizens, whether expat or not and regardless of what type of income they have.

Anything you have heard to the contrary is quite simply wrong.

MrsFychan

https://www.gov.uk/tax-uk-income-live-abroad/rent

there is also a piece on there for selling if non resident - which you are

shelmer18

Hi everyone,

Thanks for all the information.

I had no idea that this conversation would move onto the dreaded T word! This leads me to a few more questions:

1) It looks like the capital gains as a non-resident only applies to increases in value after 5th April 2015 (https://www.gov.uk/guidance/capital-...e-gain-or-loss) – see rebasing. Does that sound about right? Also, it says the valuation could be done by a ‘professional valuer’. I assume in English that means an estate agent.

2) I assume that I would still be able to use my personal tax allowance against the capital gains tax incurred. E.g. let’s say the property goes up in value by £6,000 since 5th April 2015 (as you can guess we're not talking about a very expensive property). In 16-17 the personal tax allowance is £11,000, so as long as my UK taxable income from other sources isn’t more than £5,000 that year then I’d owe nothing. Thereafter I'd owe 20% of anything above £11,000. Does that sound right?

3) As I’m sure you know there is (or soon will be, I forget the date it comes in) a 3% increase in stamp duty for buy to let and second+ properties. However, from what I read it looks like if you only end up owning one property (as I would) then it wouldn’t apply (https://www.gov.uk/government/consul...ial-properties) – see the flow chart. Again, does that seem about right, or have they found a way to sting non-residents for that too?

Thanks again!

Snowy560

Interestingly I just posted about this on the Canada forum. It's unlikely that most sellers will have any CGT liability as far as HMRC are concerned until October, 2016. In my post I wrote:

"Hi all,

I don't know if those of you who are considering selling their UK property and are non UK resident for tax purposes are up on the latest re CGT.

I expect you probably know that the rules changed in April last year, making non residents liable for CGT. We sold a couple of months after April (sale agreed before) so we knew it would be most unlikely that we'd have a liability. What I did not know, was that the sale has to be reported to HMRC within 30 days, even if you have nothing to pay (using the online form). So in case any of you didn't know that as well, I just wanted to pass it on. And as you can see from the following link, if you sell before October, 2016, it's unlikely you'll have any CGT liability:

https://www.gov.uk/tax-live-abroad-s...-home/overview

I've reported it now of course."

As for selling from afar, we did it just fine. You need a gook UK solicitor who is used to dealing with clients abroad.

S

Editha

Your link doesn't work.

Surely, if you are resident in Canada, selling a property in the UK, you can't be liable for CGT in the UK because you are liable for CGT in Canada, and the tax convention forbids double taxation?