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Foreign owners of UK property assets advised to seek property valuation to avoid CGT problems 
 
Changes to Capital Gains Tax for UK property investors based overseas were first announced by George Osborne last year and here we are now, just a few weeks’ away from the new legislation being introduced.  
 
In essence, what this will mean is that if you’re resident outside of the UK and you decide to sell a property which you continue to own here, then you will be liable to pay Capital Gains Tax on any rise in value between April 6 2015 and the date on which you sell that property, once annual CGT exemptions have been deducted (currently £11,000 per person).
 
Some investors have taken action in the last year by making the decision to sell these properties to avoid being landed with a large CGT bill.  If, however, you haven’t been able to do this or are undecided on how you wish to manage your UK-based property investments over the longer term, there is still positive action that you can take to ensure that you manage the situation most effectively. 
 
Simply, gains will accrue from 6th April and as such, we’d advise first and foremost to get a RICS Registered Valuer to carry out a valuation on your property as soon after that date as possible. That way, both you and HMRC will know exactly how much your property is worth from the very outset of the new regime and any increase can be easily calculated from that date forward. 
 
Without an accurate valuation in place on April 6, or closely thereafter, you’ll be required to seek a retrospective valuation on your property at such point as you come to sell it in the future. This will not only cost more to commission, but could also be subject to closer scrutiny and analysis by HMRC.
 
Andrews has had it confirmed by HMRC in just recent weeks that they will honour such a valuation when calculating any capital gains made in the future so can you afford not to take action now?
 
If, however, you continue to spend time in the UK, or think you may even return to the UK full time at some stage, you may wish to take advantage of the Principal Private Residence relief (PPR).
 
Under PPR, it might be sensible for a returning ex-pat to live in the property for a while and claim it as their main home to avoid the CGT bill.  However, changes are afoot here too, and moving to qualify for PPR relief, the owner of a UK property only needs to show that they have spent at least 90 days in the property for each year when they are not UK resident. These 90 days can be split between husband and wife if the property is jointly owned although obviously though this will prevent the property from being rented out other than for short periods. 
 
*Andrews’ sister company Landmark is able to offer a professional, accurate valuation and any survey booked via www.landmarksurveyors.co.uk will be eligible for a 10% discount on fees.
 
**David Westgate – Managing Director, Andrews Letting & Management, Andrews
 

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