Expats urged to value UK property

Overseas residents with homes in the UK have been urged to revalue their property to avoid overpaying tax if they come to sell it.

Following changes that came into effect this month, non-resident homeowners are liable to pay capital gains tax (CGT) on any profits they make on the disposal of UK properties.

While CGT will only apply to gains accrued from April 6 2015, individuals may leave themselves open to disputes over retrospective valuation if they do not obtain a valuation, said Adam Johnson, tax manager at financial advisers the Fry Group.

HM Revenue & Customs has said it is not necessary to have properties valued now, and instead the value on April 6, 2015 can be calculated when the homeowner sells up.

"To my mind, this has disaster written all over it," said Mr Johnson, as the tax authority could contest any valuation used to calculate CGT, currently payable at 28 per cent for higher rate taxpayers.

"A taxpayer should obtain a few valuations by estate agents, or better still a valuation by a chartered surveyor, [so] they have documentary evidence."

Tina Riches, national tax partner at accountants Smith & Williamson, said that it is common for chartered surveyors to value a property retrospectively, so homeowners without any intention to sell should not rush out to get a valuation.

She said that records should nonetheless be kept of any investments in affected properties to minimise the risk of future disputes.

To protect against tax liabilities being incurred when overall losses have been made on a property, homeowners can also opt for their gains to be calculated over the entire period of ownership.

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