Capital Gains Guide

The service we provide – valuations

For a fixed fee of £99.00, we will do a desk top valuation using our market leading industry valuation tools, provide you with an indepth report illustrating sold figures in chart form and statistical information regarding your area.

You will get a valuation letter from one of our trained valuers backed up by a Rightmove report showing sold prices and a home track report which all RICS (royal institute ) valuers use. We aim to provide all our valuations within 72 hours, delivered in a pdf by email.

How we do it

For a fixed fee of £99.00, our professional valuations team will carry out a desk top valuation using the leading valuation tools in the industry, and provide you with an in-depth report. illustrating sold figures in chart form and statistical information regarding your area.

You will get a valuation letter from one of our trained valuers backed up by a Rightmove report showing sold prices and a home track report which all RICS (royal institute ) valuers use. We aim to provide all our valuations within 72 hours, delivered in a pdf by email.

Contact us

For valuations before the Capital Gains Tax reform, please contact us here.

“Property owners that are Non UK residence or Expats need to act now to avoid Capital Gains Tax”

The New Legislation

Here at City Quays we want to help all those that will be affected by the new changes to capital gains tax. This new legislation will largely affect expat and non UK residence property owners starting from early April 2015 onwards.

The new capital gains tax, which will be implemented very soon, states that all overseas persons that own a residential property in the UK will now be taxed on any gains made from the sale of that property. The new law will also include all residential property that is rented out. This change will scare a lot of investors but once you understand how it works it is not all bad, there are ways around it and also we can help to ease the pain a little, all is explained below.

This will affect many foreign investors and UK expats who have property in this country, including those who were hoping to sell this property before returning home. Now all of these people will need to pay capital gains tax, however, there is good news, being that any gains are calculated only from the value of that property on April 6 2015. This change in the Law will only apply to future increases in value and not previous growth.

Private Residence Relief (PPR)

Relief means that anybody living in the UK who sold their principal private residence is exempt from paying capital gains tax. Meaning that if you are a UK expat holding residential property you might be able to get around this by continuing to hold the property until returning to the UK, then living in it and selling it claiming exemption from capital gains tax because it is, or was, your main home.

Before this new legislation it was required that this PPR property was the owner’s only principal residence in the whole of the world and not just in the UK, this meant that the owner had to be a UK resident. However the good news is that this is all set to change with this new legislation, with this new law to get PPR relief, the owner (non UK resident) of a UK property needs now only show that they have spent at least 90 days in the property for each year, for it to be considered their PPR. Also the 90 days can even be split between husband and wife. The PPR property now only has to be their main residence in the UK and the rest of the world.

All of this applies to properties held in individual names. Those properties are subject to UK inheritance tax at 40 per cent. Due to this a lot of foreign domiciled individuals normally obtain UK properties through companies which would allow them to avoid this 40 per cent charge. However, this is now less attractive with the introduction of the annual tax on enveloped dwellings (ATED) charge imposed on the company each year. As a consequence trusts are now increasingly used by foreign domiciles to hold UK property. In many cases a trust will qualify for the exemption from the new capital gains tax charge where PPR can be claimed.

Non UK residence and expats who have been outside the country for five years can sell their property between now and April 6 this year without incurring capital gains tax. After this date capital gains tax will apply unless they live in the property for at least 90 days for each year thereafter. Obviously this will prevent the property from being rented out other than for short periods. Or they wait until they return to the UK, live in the property and then sell which would provide partial PPR relief.

Alternative Options

Another option for foreign investors and expats who are foreign domiciled might be to sell the property to a trust now. This would trigger a stamp duty land tax (SDLT) charge but would not cause a capital gains tax problem. The trust would qualify for PPR if a beneficiary met the 90-day test for each year of ownership by the trust. Or the property could be transferred to a Qualifying Non UK Pension Scheme (QNUPS).

A QNUPS is a multi-member pension scheme which should fall outside the general charge to capital gains tax when it is introduced next April. It is also outside the scope of all the ATED charges. And the property should also be outside the scope of UK inheritance tax. It is likely to be particularly useful where property is rented out and PPR will thus not apply.