In a bid to tackle the cost-of-living crisis, 23% of British expats are considering selling their UK property, according to a report by Experts for Expats.
The survey, which was conducted at the end of 2022, asked 200 expats how the ongoing cost of living crisis was affecting their immediate and future plans.
Of the people considering selling a property in the UK, 72% of them are also receiving an income from UK property and 67% are now looking to use the equity to support their retirement.
Selling a UK residential property while living abroad can also attract capital gains tax (CGT), even if you are a non-resident.
The Experts for Expats survey also highlighted that 61% aren’t aware that capital gains tax may be due or that a non-resident capital gains tax return must be filed.
Jamie Favell, partner at Tax Advisory Partnership, said this is a far too common scenario.
“Lots of expats sell their properties and become aware of their non-resident capital gains tax obligations too late, incurring late filing penalties and facing unexpected tax liabilities,” he added. “This situation seems to be more common for people who left the UK and moved abroad before 2015 when the new non-resident CGT rules were introduced, and they simply weren’t aware of the change and have not been made aware of the changes by their solicitor or estate agent.
“Expats also need to be careful to ensure they are reporting the sale of their UK property correctly in their country of residence, to avoid further problems there too. If there is tax payable locally, then they may be able to claim a credit for any UK tax payable reducing the overall tax due.
“This is particularly relevant for people selling a UK property as the tax deduction will not only hit their equity, but any tax due has to be reported and paid to HM Revenue & Customs (HMRC) within 60 days of completion.”
Robert Hallums, founder of Experts for Expats, said: “The results of the survey are deeply concerning. It’s simply not enough to hope that selling a UK residential property is the same as when you live in the UK as when you live abroad.
“There are so many potential factors to consider that you must seek advice from specialists to ensure the sale not only goes smoothly, but also maximise your income and eliminate unnecessary costs – especially if you are planning to use the funds to re-invest or support your retirement.”