Chancellor prepares to announce that capital gains tax will be charged on British property sold

[ozziepom]

Ouch!

 

http://www.telegraph.co.uk/expat/expatnews/10458673/Thousands-of-Britons-caught-up-in-tax-raid-on-wealthy-foreigners.html

[garyupnorth]

About time he closed that loop hole, it's been going on for years foreigners gaining whilst the country looses. The state Should tax their 2nd and 3rd homes and their holiday apartments as well.

[ozziepom]

About time he closed that loop hole, it's been going on for years foreigners gaining whilst the country looses. The state Should tax their 2nd and 3rd homes and their holiday apartments as well.

 

Reason for posting it here is it will affect thousands of British people who emigrated to Aus/elsewhere and couldn't sell their houses before leaving, not I - but it easily could have been.

[Slean Wolfhead]

Reason for posting it here is it will affect thousands of British people who emigrated to Aus/elsewhere and couldn't sell their houses before leaving, not I - but it easily could have been.

 

Can't get into that link, but surely the proposed capital gains tax is on capital gains made since you left UK ?

So anybody over the last 5 years or so isn't really going to be liable for much at all, if anything?

[VERYSTORMY]

Can't get into that link, but surely the proposed capital gains tax is on capital gains made since you left UK ?

So anybody over the last 5 years or so isn't really going to be liable for much at all, if anything?

 

It depends. Prices in London have risen massively in the last couple of years

[fensaddler]

Great, I'm not rich, and I'm certainly not an oligarch. My 'property' (ho, ho, a semi in the Black Country) hasn't risen in value in ten years, except for what I have spent on improving it (in fact, it would have fallen in value if I hadn't extended it), but as soon as the market does turn up, the bastards nick what little I've got. Been a money pit from start to finish. Thank you Britain. So since this is aimed at oligarchs, I don't suppose they might consider an exemption for mere mortals whose houses are worth diddly squat? Glad I've got a good accountant.

[MARYROSE02]

B**stards! POMMIE B**stards!!

 

Does that mean I will have to go back to England, live in my house for a while again, then sell it?

 

"Let me tell you how it will be, there's one for you, nineteen for me!"

[fensaddler]

B**stards! POMMIE B**stards!!

 

Does that mean I will have to go back to England, live in my house for a while again, then sell it?

 

"Let me tell you how it will be, there's one for you, nineteen for me!"

 

Imagine the English cricket team is eleven blokes who look like Gidiot the Chancellor. I think I'd soon feel the need to switch my allegiance to the baggy green. If that git ever gets within widdling distance I'm going to make sure he gets wet shoes. I left the UK to escape the prat and still he hounds me.

[srg73]

This is a very difficult proposal to disagree with as house prices in London are flying due to international investment therefore pricing out most people, sound very much like Sydney. However on a personal level this would reinforce our thoughts to sell our uk house and invest in an Australian home. This is greater incentive for us to make the move permanant and remove the easy escape route back to uk if things become a little difficult in Oz.

 

S

[Slean Wolfhead]

It depends. Prices in London have risen massively in the last couple of years

 

Good point.

[fensaddler]

It depends. Prices in London have risen massively in the last couple of years

 

That's been Britain's problem for years - making national policy on the basis that the rest of the country is anything like London. Outside the south-east prices have flatlined for years.

[CNC FABS]

Anyone know how this will work. I see the figure is 28 %. Is this taxed on the 'profit' on the house, from when we leave the Uk as tax payers. Until we sell as Aus pr's ???

Surely it's not on the whole value of the house ?? Otherwise we would sell now, rather than rent it out for 3 years max.

Also either way. How can they enforce it if we never come back ????

[garyupnorth]

How I read it is and please correct me if I'm wrong is:-

 

if your house is worth £300k when you leave the country wether on a temp or PR and say in 2 years, you decide to sell it and it's worth £350k then you only get taxed on the £50k. I'm no expert and I'm sure that one of the money/tax peeps will be along shortly.

[Flathead]

How I read it is and please correct me if I'm wrong is:-

 

if your house is worth £300k when you leave the country wether on a temp or PR and say in 2 years, you decide to sell it and it's worth £350k then you only get taxed on the £50k. I'm no expert and I'm sure that one of the money/tax peeps will be along shortly.

I don't really understand the fuss about this.......if you are an Australian tax resident you are liable for Australian capital gains tax as soon as you make a capital gain anyway.....regardless of wherever the house is

[fensaddler]

I don't really understand the fuss about this.......if you are an Australian tax resident you are liable for Australian capital gains tax as soon as you make a capital gain anyway.....regardless of wherever the house is

 

Two governments after my money at the same time? Priceless.

[Flathead]

Two governments after my money at the same time? Priceless.

They would not be.....there is a double taxation agreement which means that any tax paid in one country is given credit in the other.

 

If you are an Australian tax resident you are liable for tax on your worldwide assets and income

[fish.01]

I don't really understand the fuss about this.......if you are an Australian tax resident you are liable for Australian capital gains tax as soon as you make a capital gain anyway.....regardless of wherever the house is

 

I believe the Australian Tax Office may offer a "main residence" CGT exemption on the UK house if you haven't purchased in Australia yet...subject to circumstances...

[Guest Andy]

How I read it is and please correct me if I'm wrong is:-

 

if your house is worth £300k when you leave the country wether on a temp or PR and say in 2 years, you decide to sell it and it's worth £350k then you only get taxed on the £50k. I'm no expert and I'm sure that one of the money/tax peeps will be along shortly.

 

So at 28% you be paying 14k on the 50k still giving you a nice profit of 36k just because house prices have risen.

[ozziepom]

So at 28% you be paying 14k on the 50k still giving you a nice profit of 36k just because house prices have risen.

 

 

...and having to pay 50k more for the same value of house in a different location giving a nice loss of 14k just because house prices have risen?

 

Just saying, doesn't affect us, we sold before leaving the UK, but plenty of people will be worse off if they didn't.

[Guest Andy]

...and having to pay 50k more for the same value of house in a different location giving a nice loss of 14k just because house prices have risen?

 

Just saying, doesn't affect us, we sold before leaving the UK, but plenty of people will be worse off if they didn't.

 

Yes but why would they sell and buy a house for the same value in a different location ( assuming somewhere in Britain ) if they live abroad?

[ozziepom]

Yes but why would they sell and buy a house for the same value in a different location ( assuming somewhere in Britain ) if they live abroad?

 

Err, not what I'm saying. Here's a hypothetical example:

 

- Mr & Mrs Smith have a house in the UK and want to move to Aus, try to sell but can't, move anyway and rents it out. 2 years later they manage to sell and make 50k profit on their purchase price - which they now have to pay CGT on of $14k so they are $36k in "profit" on owning the house (ignoring inflation, repayments, maintenance etc etc)

 

- Mr & Mrs Jones have a house in the UK and want to move to Aus, manage to sell their house before leaving, make 50k profit which they get to keep without paying any CGT.

 

The Smiths loose out because they couldn't sell their house before moving, they get some rent but still have a mortgage and running costs to pay. Both now use their savings to buy houses in Australia, the Joneses have more to spend than the Smiths as a result of legislation designed to tax foreigners (in a UK sense) on capital gains on UK property.

[Guest Andy]

Err, not what I'm saying. Here's a hypothetical example:

 

- Mr & Mrs Smith have a house in the UK and want to move to Aus, try to sell but can't, move anyway and rents it out. 2 years later they manage to sell and make 50k profit on their purchase price - which they now have to pay CGT on of $14k so they are $36k in "profit" on owning the house (ignoring inflation, repayments, maintenance etc etc)

 

- Mr & Mrs Jones have a house in the UK and want to move to Aus, manage to sell their house before leaving, make 50k profit which they get to keep without paying any CGT.

 

The Smiths loose out because they couldn't sell their house before moving, they get some rent but still have a mortgage and running costs to pay. Both now use their savings to buy houses in Australia, the Joneses have more to spend than the Smiths as a result of legislation designed to tax foreigners (in a UK sense) on capital gains on UK property.

 

Firstly why the sarcastic remark before your comment, no need for it really if you want a civilized conversation?

 

Well that's tough on Mr and Mrs Smith isn't it, they still made 36k profit and it's not anyone else's problem if they could not sell their house!

[Parley]

Great, I'm not rich, and I'm certainly not an oligarch. My 'property' (ho, ho, a semi in the Black Country) hasn't risen in value in ten years, except for what I have spent on improving it (in fact, it would have fallen in value if I hadn't extended it), but as soon as the market does turn up, the bastards nick what little I've got. Been a money pit from start to finish. Thank you Britain. So since this is aimed at oligarchs, I don't suppose they might consider an exemption for mere mortals whose houses are worth diddly squat? Glad I've got a good accountant.

 

If you have made capital improvements, as opposed to maintenance on your home, you would be able to increase the cost base of your home from what you originally paid.

 

so if you did things like built a garage, tiled an outdoor area etc you should add these costs onto your original purchase price.

This will reduce your capital gains tax bill if you did legitimately make substantial improvements to your home.

[fensaddler]

If you have made capital improvements, as opposed to maintenance on your home, you would be able to increase the cost base of your home from what you originally paid.

 

so if you did things like built a garage, tiled an outdoor area etc you should add these costs onto your original purchase price.

This will reduce your capital gains tax bill if you did legitimately make substantial improvements to your home.

 

Indeed, but the problem may be records of amounts spent. The extension was done in 2006 (I think...?) and I'm not at all sure how much of a record we have kept of all the bills, not just from the builders themselves, but also of all the other bills (architect, planning and building regs fees, buying the kitchen units for example...). In this, I doubt we are much different from many people. How many of us have complete records of major purchases from seven or eight years ago, especially when we have moved across the world in the meantime?

 

I notice that this is one of the points made below the line on the original Telegraph article - that in effect getting this properly calculated depends on people having records from many years ago, which they never thought they would need for tax purposes. There is a degree of retrospective and punitive malice about the whole thing - but nothing less then I would expect from Gidiot.

[Guest]

It is irrelevant whether you live overseas or not - if you rent a house out and then sell it you are liable for CGT, in fact even if it is empty if you are living elsewhere (even renting) then you can be liable - if it has previously been you main residence then it is proportionate to how long you lived there. It is not as simple as the increase in value since you left the property.

 

There are exemptions though - for example if you sell within three years...this is a short but informative article...

 

http://taxaid.org.uk/info/capital-gains-tax/selling-our-main-private-residence

 

I'm not saying some of that won't change with the new rules but essentially anyone leaving a house in the UK and living elsewhere does have a second home, the Australian one is their main residence and if that continues long term they would have always been liable for CGT.

 

 

 

 

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