|
£3.3 Trillion House Market |
|
|
|
Sunday, 06 February 2005 |
|
The UK's housing market is worth a staggering £3.3 trillion after the value of the average property has soared over 50% in the last 3 years. The value of a typical house/flat is now over £150,000 according to figures released from the Halifax Building Society. The smallest rise was in Scotland and the highest in Northern Ireland.
However, there is a downside to this exceptional growth and Gordon Brown is looking forward to getting his pound of flesh from UK homeowners. If you own UK property, will you fall foul of Mr Brown's cunning plans ...
Eventhough property prices have soared the taxation levels on Capital Gains taxes and Inheritance Tax have hardly followed suit. Consider the two issues as follows:-
Capital Gains Tax (CGT) - This is applicable to properties outside your main residence and you are taxed at 40% on any gain over and above your allowance of £8,200. If you are non-resident for taxes in the UK then you are not liable so selling your property could be an option before going home. Incidentally, housewives are technically never non-resident since they do not have a contract of employment so if you have your properties in joint names your wife could be getting a CGT bill. Make sure you sell at the right time too and not during the tax year you return home. If you have just come offshore then you could be liable on any disposal if you return within 5 years.
Inheritance Tax (IHT) - Widely misunderstood by many. This tax is based on your worldwide assets and is not governed by tax residency but your domicile. For example, if you have lived in Dubai for 50 years but were born in the UK then you are UK domicile. If you are from India but have been living in the UK for over 17 years then you are deemed domicile. You will be taxed on your worldwide assets at 40% (soon to rise to 50%) after the nil rate band of £263,000. Take your property, insurance, deposits, pension plans and the like and you are soon into keeping wee Gordon a happy man.
There is a way around this (legally) but you need to make the effort to sort out your affairs. Many investors we speak to put off their tax planning - crazy when you think you can lose more in a day with the Taxman than in the stockmarket. Careful use of offshore structures and Trusts and taking advantage of your gifting allowances can greatly reduce this burden. And since we do not know when we are going to die, it makes sense to take time to protect your assets for your beneficiaries and not for the benefit of Tony's petty cash pot. The Inland Revenue are very efficient at collecting and take enough in a month to run the Armed Services for a year.
Don't leave it to chance and contact us today for an appraisal on how to protect your assets. Do it now and send us a quick email - our initial discussion does not cost you anything and we could be saving you a small fortune! |
