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Expatriate Property Taxation

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Expatriate Property Taxation

If you have been a UK non resident expatriate for about 75% of the last 10-15 years, you are UK domiciled for tax purposes, and bought the properties when you lived outside the UK you will not be liable to Capital Gains Tax if you sell in the tax year before the year you move back to the UK as a UK resident.

This exception is for people who do overseas service and invest in the UK whilst they are overseas. If you have spent less than 75% of your time overseas, you will still be able to get tapered Capital Gains Tax relief. However, if you move back to the UK you will be then liable to the full Capital Gains Tax burden unless you roll your properties into a family Trust or Company.

Most banks and building societies will not allow this since they like to lend to individuals and have simple standardised processes – their competitive rates and cost structures do not cater for such complexity and requested flexibility. They also probably deem it higher risk to lend to a Trust with two or more Trustees – since they perceive their control to be reduced, particularly if they have no say in the structure of the Trust.

If you are working overseas and have a significant property portfolio and/or property capital gains tax liability – my advice is to contact a professional tax planner a year before the tax year you are due to arrive back in the UK in – the tax professional can advise you on how to optimise your investments and advise you of your tax liabilities.

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