If you’re a non-UK resident and you own an investment property in London then it’s in your best interests to get a property valuation sooner rather than later. It’s very likely that you will be affected by the changes to the Capital Gains Tax that came into effect on 6 April 2015.
As of 6 April 2015 non-UK residents now have to pay Capital Gains Tax on the profit they make on the sale of any UK property. UK residents have always had to pay this tax on any property that wasn’t their primary residence, but up until this year, non-residents didn’t pay any tax on their gains. This made the London property market even more appealing to foreign property investors.
These changes will affect the tax that both foreign nationals and non-resident UK citizens will have to pay when they sell their properties. So if you live abroad, but still own a London property, you should probably consider getting a property valuation too.
Why get a property valuation now?
You will only be liable to pay the tax on gains that you make after 6 April 2015. So if your London flat increased in value by £100,000 between when you bought it 3 years ago and April 2015, you won’t need to pay capital gains tax on that amount.
However, you will have to be able to prove what the value of the property was in April 2015 so that you’re not liable to pay tax on any capital gains you made before that. A valuation by a registered property valuer will give you all the proof you need when you come to selling your property. It’s unlikely that a retrospective valuation done when you come to sell the property is likely to be viewed as equally legitimate to one that was carried out in 2015.
If you need to find out more about these changes to the tax laws, visit www.gov.uk/capital-gains-tax/overview.