Covering the Bases

Rupert Smith of Complete RPI gives an overview for those looking at mortgage finance options in the UK residential market

The Taxman Cometh

As you may or may not be aware, it has been announced that from 6 April 2015 all UK non-residents disposing of UK residential property are required to pay Capital Gains Tax based on any profit realised.

Should you wish to sell your property after this date, you will need to prove to the Inland Revenue the value of the property (the base value), in order that the profit can be assessed and subsequently taxed at the prevailing rate of 18 to 28% depending on your tax bracket.

It will be the responsibility of the seller to provide evidence to the HMRC (the UK tax authority) what the base value was at 6 April 2015. As a result, it is therefore vital that a Royal Institute of Chartered Surveyors (RICS) valuation is undertaken in order to protect your interest and prevent unnecessary tax claims against you in the future. If not, then backdating a valuation after this date will likely cause a major problem and a large cost for any property owner.

As a result of the new legislation, Complete RPI can facilitate an independent RICS valuation on your behalf. It would be very wise to have this carried out in order to safeguard your best interests: time, money and future hassle.

What is the cost, I hear you cry? Typically the rates are as follows and can vary owing to location:

Property Value / Cost

Up to £500,000 / £700 plus VAT
£500,000 to £750,000 / £800 plus VAT
£750,000 to £1 million / £900 plus VAT
£1 million to £1.5 million / £1,000 plus VAT
£1.5 million to £2 million / £1,100 plus VAT
£2 million + / £1,200 plus VAT