Owners of overseas property could be in for a two-fold tax hit due to falling sterling and property prices, warns PKF Accountants & business advisers.
Matt Coward, director of personal tax, says UK tax laws stipulate any gains on overseas assets are calculated using the spot exchange rates on the given day assets are bought and sold. He says: "In our case study, a UK national buying a Spanish property in January 2007 for €1.25m (£854,818) sells in January 2009 for €1m (£966,744). "Although there is a loss in euros, there is a profit in sterling of £111,926 on which he will need to pay UK CGT of at least £18,419 on 31 January 2010." Coward warns this predicament could worsen if homeowners decide to invest in a new overseas property w...
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