Question:
I have £75,000 left on my mortgage, and my house is valued at £140,000-£145,000. How much money will I lose in tax, and how is the best way to avoid this? My girlfriend resides in Germany and Netherlands. Would it help me avoid tax if I move over to her and sell it there? I don't like the idea of paying 40% tax on anything over £41,000 that I earn and 25% up to £41,000.
Arthur Weller replies:
Firstly, it is not possible to say how much capital gains tax (CGT) would be paid on selling this house, because you haven't said how much you paid for it - your mortgage is not relevant for CGT purposes. If you moved abroad and became non-UK resident, you would be liable to UK CGT, but only on the amount the house has increased in value from April 2015 onwards. Additionally, the rate of CGT is 18% on gains below the higher rate threshold of £43,000, and 28% on gains above this figure.
