Thinking of Selling Your UK Home After Buying Abroad? What About Capital Gains Tax?

Imagine this: You and your significant other have been living in the UK for years, with a lovely home to call your own. But recently, the allure of sun-soaked Greece beckoned, and you both decided to invest in a property there. Your long-term plan? To retire under the Grecian sun. But as retirement looms and you think of selling your British home, a big question arises: What about taxes?

Capital Gains Tax and Your UK Home

For Guardian reader DS, this isn’t just a hypothetical scenario. DS writes, “My wife and I have recently bought a house in Greece with plans to retire there. But in the interim, while I’m enjoying Greece, my wife will be working in the UK, six months on, six months off. When we’re both retired and ready to bid the UK goodbye, will the sale of our UK home be subject to capital gains tax?”

The answer from the Guardian’s expert, fortunately, is a reassuring one. The proceeds from selling your UK residence will not be subject to capital gains tax (CGT) due to private residence relief. Essentially, this relief exempts main homes from CGT.

However, with two properties under your name, there’s a catch you should be aware of. To steer clear of any potential tax pitfalls, it’s a good idea to inform HMRC that your UK home is your “main residence”. Make sure to do this within two years of purchasing your Greek property.

Other Essential Points to Consider

  • Home Insurance: If you’re thinking of spending extended periods away from your UK home, be sure to check in with your home insurance provider. Many policies cover you if you’re away for up to 31 days, but any time beyond that might render your policy null and void. The good news? Some insurers might still cover you during extended absences provided you take measures like regular house check-ins, maintaining your garden, and adjusting utilities like heating and water.
  • Staying in Greece Long-term: If you’re looking to stay in Greece for over three months, it’s essential to secure a D visa, which allows long-term residency. And a heads-up for the future: You might need to pick up some Greek. So, diving into language classes or online platforms like Duolingo or Language Transfer can be a great start.

The Bottom Line

Making a big move, especially one that crosses borders, can come with its share of complexities. But with the right information and a bit of preparation, your transition can be as smooth as the serene waves of the Aegean Sea. Whether you’re learning Greek or chatting with HMRC, each step takes you closer to your sunlit retirement dreams.