You are here: Home - Mortgages - Buy To Let - News -

Overseas home owners feel the pinch

Written by:
The falling value of the pound means that the cost of running an overseas property has increased and those wishing to sell face a rising capital gains tax bill.

Because UK capital gains tax is calculated on the basis of proceeds less cost, expressed in sterling terms at the point of purchase and sale, home owners could find themselves paying capital gains tax on a sale, even if the property value has not increased, says accountants at Baker Tilly.
“Take a property bought for €250,000 at last August’s rate. In Sterling terms the cost was £195,000.

“A sale now, for the same Euro value, and therefore no real gain, would mean Sterling proceeds of £219,000, giving a taxable gain of £26,000.

“This is even if the money stays abroad or is used to repay a mortgage. That should make anyone thinking of offloading a property, which is becoming too expensive to run, think twice.”
With this month seeing HMRC targeting UK residents with second homes, advisers with clients in this position need to consider what planning can be undertaken to reduce the tax.

According to Baker Tilly ensuring the property is sold in joint names with a spouse or civil partner to maximise reliefs and/or lower rates of tax is essential. Taxes in the local jurisdiction should also be considered.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • RT @Defaqto: Will your home insurance leave you out in the cold? 🤔 Only a fifth of home contents insurance policies, and a quarter of home…
  • Will your home insurance leave you out in the cold? 🤔 Only a fifth of home contents insurance policies, and a quar…
  • 10 reasons to get your #TaxReturn done now - and they could all mean more money for you! 💷 Questions about your ta…

Read previous post:
PM promises Budget help for first-time buyers

First-time buyers will receive “vital” help through forthcoming Budget measures that build on the success of Funding for Lending, the...