There are many reasons why someone might want to sell their home abroad. The two main ways to do it are to find a buyer abroad or an English-speaking company that can handle the deal for you. This piece tells you how to sell your house abroad in a smart way.
As of April 6, 2020, there were changes to the information you need to report if you live in the UK and are considering selling overseas property.
This means that if you are self-assessing, you need to include the sale of a second home or residential investment property on your tax return, whether it was in the UK or another country. The date of exchange is the most important date for this, and it needs to be done by January 31 after the end of the tax year in which the sale occurred.
On or before January 31 of the next year, capital gains taxes must be paid. This is because they must be paid by the end of the tax year in which the sale happened.
The “Real-Time” Capital Gains Tax Service from HM Revenue and Customs lets anyone report this sale, even if they haven’t signed up for the self-assessment system yet.
A property sale must be reported to HM Revenue & Customs within 30 days of closing as of April 6, 2020. This is the case whether the sale takes place in the UK or somewhere else. Also, the capital gains tax has to be paid within the same time frame. The rules for non-resident capital gains tax reporting will be the same as they are now.
If there are several sales of a house, each one needs to be filed and paid for separately. There is no need for the changes if the capital gain is fully covered by main private housing relief, losses from previous years, or the yearly capital gains tax exemption. If you are going to report the capital gain in the foreign country and get double taxation relief, or if you are going to be taxed on the capital gain on a transfer basis, you do not need to report the sale.
If any of the above situations only partly cover the gain, the sale must be recorded and any capital gains tax must be paid within 30 days.
Persons who want to sell private property will have to follow more rules, which will have an effect on their finances because of these changes. If you want to sell a house after April 6, 2020, you’ll need to be careful and get help much earlier than usual.
If someone lives in the UK, they are taxed on all of their income and gains, no matter where they come from. If you kept your property as an investment instead of as part of a business to build homes, you may have to pay capital gains tax in the UK.
If someone lives in the UK but doesn’t have their main home there, they may not have to pay tax on the gain until the money is sent back to Britain. See below for more information on this.
You may or may not have to pay taxes on the sale proceeds (Profit only), depending on the tax laws of the country where the property was located. In most countries, you have to pay taxes on the money you make when you sell your home. You also have to think about any local transaction taxes.
If a gain is taxed in both the UK and the country where the property is located, you can get double tax relief. This will keep you from having to pay tax twice; you will only have to pay the higher UK or local taxes. To avoid being taxed twice, the UK has worked out tax agreements with a number of other countries.
After figuring out the UK’s and other countries’ tax situations, it is important to look at the relevant deals to figure out which country has the main taxing power and how double tax relief will be given.
Any money you made outside of the UK while you weren’t living there may be taxed if you come back to the UK within five years. This doesn’t include pay or other work-related income. As part of moving to the UK, you need to move money to a bank account there.
