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Strategy for repatriating

Question

Hi
We are planning to repatriate to the UK after 20 years in Belgium. To make it easier, we are planning to stagger the move. Meaning I would move first, get a job, and set things up in a rented property. The family would follow a few months later. If we sold our Belgian home at the moment my family move but after I move, what would be the impact on capital gains tax ? I checked the gov.uk website, but I can't find info for this specific scenario. By the way, the house is jointly owned. If this requires professional tax advise, can anyone recommend an independent adviser. Thanks!

wezembeekwanderer

Talk to a notary. It’s usually free until they actually do anything. Berquin Notaris are good for international questions. .

Mar 1, 2020 22:56
J

No capital gains tax in Belgium.
No capital gains tax on your home in UK.

You don't need a Notaris. You need a psychiatrist.

Mar 1, 2020 23:29
anon

Please be careful taking advice for something so important on the internet from strangers, including me.

However, you need to be really careful on this one. I hate to disagree with "J", but there absolutely is capital gains tax on the sale of property, and property overseas, if the property isn't considered your main residence.

If you move back and are resident in the U.K. and depending on how quickly the rest of your family move back and when you sell your house, your home in Belgium could easily not be classified as your principle residence and you could be liable for UK capital gains taxes on the sale as you may be tax resident in the U.K. at the time of the sale.

https://www.gov.uk/tax-sell-property/selling-overseas-property
https://www.gov.uk/tax-sell-property

In any case, you will have to declare the sale to the UK revenue when it is sold.

I would strongly suggest that you get some proper professional advice in the U.K. Immediately.

Particularly at this time of year running up to the end of the U.K. tax year on April 5th, there can also be very significant tax savings that can be made depending on the timing of your move. i.e. if you move before that date, you could get your tax free personal allowance both in Belgium for 2020 and in the U.K. for the tax year to April 2020, and a third tax free personal allowance for the actual 2020/2021 UK tax year. That means you could get three personal allowances (something like £30,000) tax free in the calendar year 2020.

Assuming a good accountant costs you £100 per hour, any work they do for you will easily be paid for out of tax savings.

Mar 2, 2020 09:30
abc123

I agree with anon - you really need specialist advice, it can be very complicated.

(Not the same I know but we have been resident in Belgium for 20 years but are UK citizens. We recently sold our property in the UK that we have owned for more than 30 years, and we lived in it when we were in the UK. The govt website that calculates capital gains tax gave us three possible liabilities for CGT from £30,000 to zero. And then invited us to choose which one we would like to accept. Ahem..)

So it really can be very complicated according to your personal situation and you should read all the information you can and take advice if you need to.

Mar 2, 2020 18:31
J

In the UK, if you own 1 house and you sell it, there's no capital gains tax to be paid. Regardless of where the house is. Capital gains on housing only comes in when you own more than one property, then it gets complicated. Temporarily renting won't make a difference to that.

In Belgium, there's no CGT payable on a property you've owned for over 5 years.

This is a very clear cut case. It's not complex.

Mar 2, 2020 21:29
abc123

J, the law changed in about 2015.

It meant that our one and only house (anywhere - we haven't bought here), that had been our family home in the UK became liable for CGT.

That's why any calculation is complex - before 2015 (or thereabouts) we were not liable, post 2015, we are.

CGT could be calculated over the whole period or just the rise in value since then.

As I said, it's complicated.

Mar 2, 2020 22:18
abc123

Sorry, probably should point out, this is because we live overseas - the legislation was aimed at folk overseas buying for profit. Even one property.

And the fact the the house had been our family home , didn't remove our liability.

A UK resident, as J says, has no CGT on the family home in the UK.

Again, a property held in Belgium, I don't know.

Mar 2, 2020 22:22
anon

@Blue, as I said already, for something so important, please be careful taking advice from strangers, including me. It's not that simple.

As ABC123 notes above, the law changed in 2015.
https://www.gov.uk/tax-sell-home/nominating-a-home

"Overseas properties - From 6 April 2015, you can only nominate an overseas property [as your main home] if you lived in it for at least 90 days in the tax year."

For example, you move to the U.K. today (in the 2019/2020 tax year) rent a house and get a job. But you sell the house at the end of the school year in June (in the 2020/2021 tax year) when the rest of your family move back to the U.K. You will not have been resident in the property for 90 days in the in the 2020/2021 UK tax year when the gain is made.

You could be in a situation where you have a liability as a UK tax resident, but your spouse does not have a liability as they have lived in the property and are not U.K. tax resident.

I would strongly recommend that you contact HMRC and speak to them for guidance.

Mar 3, 2020 07:49
J

I have actually been in a similar situation, and yes, I am basing what I say on (free) advice that I got from HMRC.

Mar 3, 2020 17:20
blue

Thanks to all that gave comments. So I called HMRC and they confirmed what J said, and that as long the property is sold within "a year or so" of being back, no CGT will be applied. Not exactly a definitive answer, but it seems that it should be fine.
As for the timing of the move, the personal allowance factor is certainly something to think about
Thanks

Mar 4, 2020 13:02

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