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United Kingdom (UK) - Property Legal Issues
Since there are different ways to purchase property and a variety of taxes that apply, it is important to have a real estate solicitor on hand to help with the paperwork. It is also helpful to seek out tax and real estate advice regarding how to purchase the property.
The United Kingdom does not have specific “residence” definitions, although in 2013 an announcement was made to have a statutory residence test that would prove when an expat should be taxed for capital gains and sales. This new consideration aims to find out how often an expat stays in the newly purchased residence and whether it can be considered a main residence of the purchaser. If the domicile status is the UK, then the owner can be subject to taxes. For this reason, looking into buying property as a company might be a better option for tax purposes, although this does depend on the type of company. If an expat works for a company in the UK but is not considered self-employed then there is no other option than owning the property as an individual. In this case taxes on inheritance, VAT, sales, and capital gains can apply. The only way to determine a particular situation is to speak with a tax group or real estate solicitor.
Another key difference for expats in the UK looking to buy property is repatriation of assets. Certain countries such as Thailand require any funds to be repatriated if the expat leaves the country, which can create issues for withholding taxes. In the United Kingdom, funds can be moved to or from another country without withholding tax. The UK makes it relatively easy for expats to purchase property, sell that property, and bring their funds back home. However, this does not mean that an expat’s home country will not have a process that must be followed that could make changing assets between the home country and UK less easy.
Further Details on Property Issues
There do not appear to be any restrictions on how long an expat has to own a property before re-sale; however, it is a good idea to speak with a representative and determine whether there are ant issues with buying property as an investment and selling it. At the very least there may be certain tax complications.
Since entering the UK requires a work permit, visa, or UK citizenship to stay longer than six months, there may be a need to have this documentation in order to stay in the property.
When buying land instead of a building, an assessment or survey is necessary to determine the boundaries, planning permissions, and type of building that can be put on the property. These restrictions apply to anyone buying property and are not restricted to expats.
There are certain types of property that are best to avoid when considering purchases as an expat. Listed buildings are legally protected through organisations such as English Heritage and you may be required to perform numerous costly renovations on the property. Financial assistance is also scarce when it comes to property restoration.
Buying property that needs repairs requires a significant amount of investment. Preservation orders place restrictions on work that can be done both inside and outside a property. Preservation of a historical building requires the ability to maintain its historical significance, which many people can find troubling in terms of cost.
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