CGT on UK homes for French residents

[YCCMB]

Not all - indeed, probably not many - of the people buying up property in the UK (London, anyway, which is where it's almost reached crisis point) are multimillionaires. For example, the vast majority of people in Singapore don't own their own homes, and a lot of them opt to buy property abroad as an investment. These are relatively ordinary folk who can never buy in their own country, but have the means to buy, so they invest in properties all over the place. That's to say, Singaporeans as a whole invest all over the place, it's not a case of any individual amassing a vast portfolio. The wealthy Chinese are another group. These aren't Gulf state squillionaires or Russian oligarchs, but often just fairly ordinary people looking for a solid investment. So yes, there will be a small proportion who have found a way round it, but those are people who will have bought a place on The Bishops Avenue in Hampstead, or a nice little pied a terre in Kensington or Mayfair.

[Rabbie]

As CGT in the UK is one of the lowest and property prices tend to rise quite quickly I don't think this tax will stop much investment. As an aside there was an implication in the Torygraph that the change would only apply to British nationals living abroad. Only saw on a sheet we got from neighbours for our recent litter of puppies so couldn't find any more info

[Pickles]

[quote user="Rabbie"]As an aside there was an implication in the Torygraph that the change would only apply to British nationals living abroad. [/quote]

That would be utterly pointless. However, the implementation of this policy requires a change in the way that property sales are carried out for non-residents. Steps have already been taken to apply extra tax on future purchases of high-value residential property by companies (but a property that has already been bought through a company remains outside these provisions). At the moment most (all?) CGT collections in the UK are effectively the result of self-declaration (but so are taxes on self-employed incomes and rental incomes). HMRC can access Land Registry records to track changes in ownership and declared prices paid, but this is effectively "after the fact", and was noted above, if the seller has no other connection with the UK and disappears off to wherever with the profit, then good luck with clawing back any of that. The only way round is to go to a system such as the French one where CGT is calculated at the point of sale and the tax is deducted from the sale proceeds before they are passed on to the vendor.

[Chancer]

Thanks for the explanation and confirmation Pickle.

Its what I had thought but based on word of mouth from "bloke down the pub" etc about people who had not paid it, they themselves are not likely to shout about it although I have seen a TV program called "how I made my property millions" and listening to the people like Sarah Beany recounting their beginnings it was apparent from the figures quoted that CGT may have been overlooked.

[Quillan]

I know somebody who has sold about three or four properties in the UK yet (allegedly) claims to be tax resident in France. He claims nobody ever asked him if any of the properties were his main place of residency and as he never said anything no CGT was ever paid (allegedly, he is a bit more than a bloke who told me down the pub).

There must be some simple way to detect if the person should pay CGT. The first step it to make it illegal for the solicitor not to ask and then to seek proof. It should be mandatory to use a solicitor to be involved. But how could you find proof? I would suggest the electoral roll, passport and a valid tax return but there might be other places where they can check. In this modern day surely this can be done by an extranet. You don't need shed loads of information, simple yes and no answers and a date or range of dates. I would think solicitors would love to do this, a couple of minutes work for the secretary and £200 on the bill for the service.

Mind you, and a bit off topic, I had a copy of what I thought was a stolen passport. All I wanted to know is if it had been reported stolen. Phoned the Passport Office in the UK and they refused to answer the question on the basis that it would break the rules under the data protection act. I pointed out that credit card companies do this (sellers check with them) for high value items but they still wouldn't do it. So some poor barsteward may have had his passport nicked and it was being used to get all sorts of dodgy things which he may end up being responsible for and I might have had the possibility of finding out who the thief was and possibly capture them and nobody wanted to know. So it seems to me that if the government can get some money out of people all well and good but if people want to save themselves a load of grief then they can forget about it.