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UK expats to be caught in wealthy foreigner tax raid
| Published: | 20 Nov at 6 PM |
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As part of his Autumn Budget Statement the UK Chancellor is expected to announce that overseas nationals and British expats will be charged capital gains tax on UK property sales.
The tax raid due to be announced by George Osborne was revealed by Deputy PM Nick Clegg, and was originally aimed at wealthy foreign buyers of luxury London properties, a trend which has seen house prices rocket amid fears of a housing bubble. Thousands of expats who live abroad but have kept their UK homes are expected to be caught in the tax net should they decide to sell.
Those most at risk are UK citizens who are classed as non-resident for tax purposes, many of whom will have been living outside the UK for years. Around 5 million Britons live overseas, although it’s not known how many will be affected by the legislation.
Also affected, according to tax experts, will be those who leave the UK to work abroad on contract and decide later to sell their UK home. Foreign buyers have forced up London house and flat prices over the last several years, with the majority buying for investment purposes and pricing British buyers out of the market.
At present, UK property owners must pay capital gains tax only on the sale of a second property such as a holiday home, but foreign investors are exempt from the tax when their UK property is sold. A rate of 28 per cent is expected to be set on the sale of all second homes in the UK owned by overseas buyers, whether they are expats or foreign investors.
The tax raid due to be announced by George Osborne was revealed by Deputy PM Nick Clegg, and was originally aimed at wealthy foreign buyers of luxury London properties, a trend which has seen house prices rocket amid fears of a housing bubble. Thousands of expats who live abroad but have kept their UK homes are expected to be caught in the tax net should they decide to sell.
Those most at risk are UK citizens who are classed as non-resident for tax purposes, many of whom will have been living outside the UK for years. Around 5 million Britons live overseas, although it’s not known how many will be affected by the legislation.
Also affected, according to tax experts, will be those who leave the UK to work abroad on contract and decide later to sell their UK home. Foreign buyers have forced up London house and flat prices over the last several years, with the majority buying for investment purposes and pricing British buyers out of the market.
At present, UK property owners must pay capital gains tax only on the sale of a second property such as a holiday home, but foreign investors are exempt from the tax when their UK property is sold. A rate of 28 per cent is expected to be set on the sale of all second homes in the UK owned by overseas buyers, whether they are expats or foreign investors.
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