Do you own a home abroad, an investment property in the sun or a house for your retirement overseas some day soon? If so you could be in for some tax back on the property thanks to changes in laws in the UK and parts of Europe. It’s true, there is some tax to be clawed back for owners of foreign property - depending on when you bought, how you bought, where you bought and even when or if you sold.
It’s about time we posted some positive property tax news on this website – and so today we’re more than happy to tell you that you could be in line for thousands of pounds of property tax rebate…if you’re lucky!
If you bought a property abroad, you’re a UK resident for tax purposes and you were advised to buy through a company structure, you may well be eligible to reclaim benefit-in-kind tax payments made from the British government. Those who own homes abroad through a company were forced to pay a benefit-in-kind tax as they effectively enjoyed use of the property that was owned by the company. However, thankfully this really unfair tax has been scrapped in an unusually ‘nice’ decision made by the government.
The even better news is that the decision is retrospective – i.e., it is backdated for 20 years and so if you own a property overseas through a company and have ever paid a benefit-in-kind tax through a self assessment form, you need to contact your local tax office or your accountant to see about reclaiming monies paid.
Note, if the property is held in a company and the shares from which are in turn owned by a family trust, this new exemption does not apply I’m afraid. If in doubt, ask your accountant or the local tax office.
If you once owned a property in Spain and you sold it some time between March 2004 and December 2006, the Spanish government could owe you up to a 20% tax rebate on the capital gains tax you may have paid upon the sale. The reason behind this is because Spain used to try and tax non-nationals more CGT than local Spaniards paid and the good old EU decided that that was a little unfair. Nowadays Spain charges a flat 18% for residents, non-residents and nationals alike…but if you were caught out before the EU forced Spain to change the rules, you may be eligible for tax back. Mind you, we wish you luck as it is highly likely to be an uphill struggle to reclaim the money and it might mean you have to revisit your UK CGT for the same period and make adjustments. If in doubt – always seek tax advice!