Tax on UK home sales when you live abroad

Everything you need to know about tax if you live abroad and sell your UK home

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

Do you have to pay tax if you live abroad but have sold your UK home?

Whether you have to pay tax if you live overseas but have sold your UK home depends on a number of things, such as whether you are classed as a UK resident or not. However, even if you don’t need to pay any tax, you do still need to tell HMRC if you have sold the property and you must do this within 30 days of transferring the ownership of the property.

Whether you are classed as a UK resident depends on a number of factors, but it tends to depend on how much time you spend in the UK during any given tax year (6th April to 5th April the following year).

You are automatically classed as a UK resident if either:

  • You spent 183 or more days in the UK in the tax year; or,

  • Your only home is in the UK (owning, renting or living in it for at least 91 days in total) and you have spent at least 30 days there in the tax year.

You are automatically considered to be a non-resident if either:

  • You spent fewer than 16 days in the UK (or 46 days if you haven’t been classed as a UK resident for the previous 3 tax years); or,

  • You work abroad full-time (at least 35 hours per week in average) and have spent fewer than 91 days in the UK, of which no more than 30 were spent working.

If you are a non-resident, you will only pay tax on any gains (profits) you have made since 5th April 2015 but you might be able to get some form of tax relief to soften the blow.

When can you get tax relief?

You generally won’t pay any tax for any tax years in which you, your husband, wife or civil partner have spent at least 90 days in your UK home but to qualify for this tax relief, you have to nominate it as your main or only home to HMRC when you tell them you have sold the home.

When might you only get partial tax relief?

Sometimes, you might not qualify for full tax relief but you may be able to claim partial relief. This could happen if you are entitled to tax relief in one tax year but not in others. Some of the reasons you might not be eligible for tax relief in a certain tax year are:

  • you have let a part of your home out (not including lodgers as they are treated differently by HMRC);

  • you have used a part of your home for business only and it hasn’t been used for any family or domestic purposes at the same time;

  • the grounds of your home, including all buildings which are considered a part of the home, were greater than 5000 square metres in total (this is just over an acre).

The last 18 months you own your home are classed as the ‘final period’ by HMRC and in most cases, you will get full tax relief for that period if you have qualified for tax relief at any point before. If you are disabled or in long-term residential care, that final period is extended to 36 months.

However, there are a few instances where you might not qualify for tax relief in that final period. For example, you won’t get any tax relief for that ‘final period’ for any part of your home that you haven’t lived in (maybe because you have let it out) or that has been used for business. You will only get partial tax relief for that ‘final period’ if the grounds of your home are larger than 5000 square metres in total.

Although HMRC have an online calculator to help you work out how much tax relief you might be entitled to, complicated cases like this are very often better served by using a specialist tax adviser. That way, you can be sure that you are getting your full tax relief. Our experts are at hand to help you sort out your taxation affairs – call our friendly team on 0330 122 9972.

How can DSR Tax Claims help?

We know that working out how much tax you owe on UK home sales when you live abroad can be a complicated affair, even with our helpful guide to tell you everything you might need to know. It’s all very well reading about it and knowing what HMRC’s stand on it is – but how do you apply that to your own circumstances? It can seem like an absolute minefield but help is always available and you don’t need to battle through this alone. Our team of experts at DSR Tax Claims are always on hand to help our client and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

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