What should I consider before I buy or sell a property abroad?
The world has become a more accessible place for property investment with the advent of travel and technology. A lot of us tend to invest and buy a property overseas for a plethora of reasons whether it is a life-long dream for many people looking for sun, relaxation – and perhaps a place to retire.
Some will plan on basing themselves abroad for a few months of the year while others will want to relocate permanently. Many will pick spots on the Continent though some will venture further afield.
What legal advice do I need when buying a property abroad?
When it comes to purchasing a property abroad each country will have a different legal system which must be followed so you need to be aware of this. Having different legal systems to contend with makes the whole process of buying a property abroad very complex which people simply do not realise.
Which lawyer should I use when buying a property abroad?
Many property owners encounter problems as they use lawyers who are recommended by either the estate agent or developer selling the property. It is essential therefore that you obtain independent legal advice from an English speaking lawyer who is licensed to practice and experienced in property sales. An independent lawyer will be best placed to advice and guide you through this process and will help protect you against the common pitfalls, see www.gov.co.uk for more details.
Do I have to be present when buying or selling a property overseas?
Many countries will use the 'notarial system' where the buyer and seller need to be present with a legal representative at the same time to check and sign legal documents to transfer property.
If you are unable to attend to the purchase or sale abroad personally, we at F Barnes offer a notarial service to notarise and authenticate paperwork to facilitate such transactions. In most cases you will need to sign a power of attorney authorising agents or lawyers abroad to undertake the transaction on your behalf. All such paperwork can be signed before a Notary Public in the UK ensuring that the transaction moves and progresses smoothly. Our Notary Public is Sangeet Tatem
What Tax will I pay on buying or selling a property abroad?
Advise needs to be sought from the agents and lawyers abroad of the consequences and tax positions and how it affects the clients tax planning strategies in the UK.
Will I have to pay UK Tax when buying or selling a property abroad?
This area is complex and is different to each individual. As a general rule you will be liable to pay Capital Gains Tax but you may possibly be able to claim some tax relief if you are being taxed twice.
At F Barnes we advise of the implications of your property sales and purchases in relation to your UK position covering inheritance and Capital Gains Tax consequences so that you are fully aware of your liabilities with no surprises.
Does my English will cover property owned by me overseas?
Not necessarily. Overseas property is generally put into two different categories as far as inheritance law is concerned.
If the property is 'immoveable' such as land or buildings then this would normally be the subject of the inheritance laws of the country it is in and will not be covered by your English Will.
In this instance you will need to prepare a Will that is recognised in that country or without a valid Will it will pass under the Inheritance laws of that country.
If the property is recognised as 'moveable' such as money, shares and personal belongings then as a general rule these items would be covered under your English Will although this is not necessarily the case as it differs according to the country the property is in at the time.
We would advise that if you are investing in a property overseas you seek advice on the drafting of your Will in the UK. We are able to talk you through the whole process and will guide you as to the need to have a second Will prepared in the country to which your property relates.
There are rules that state your current Will revokes all previous so it is important to ensure that to have everything covered you make sure who ever prepares the Wills for you knows that you have more than one.
What other Tax implications are there with ownership of a property abroad?
It is important to note that there are:
- Inheritance tax implications on emigrating abroad
- Tax consequences in connection with foreign spouses
We can advise on both aspects.
What services can a Notary Public help with?
A notary can not only assist with the above but they can also assist with the following:
- preparing and witnessing powers of attorney for use overseas
- dealing with purchase or sale of land and property abroad
- authenticating foreign wills and providing documents to deal with the administration of the estates of people who are abroad, or owning property abroad
- providing documents to deal with the administration of the estates of people who are abroad, or owning property abroad
- affidavits, oaths and declarations
- authenticating personal documents and information for immigration or emigration purposes, or to apply to marry or to work abroad, such as education or professional qualifications or declarations of freedom to marry
- authenticating company and business documents and transactions or providing certificates as to the status of a company or the identity of its directors
- consent forms for minors to travel abroad
- change of name documents or deed polls
- sponsorship forms
- police documents, CRB checks
- proof of life forms
- certifying all documents
- legalisation at the Foreign Commonwealth Office and other embassies and Consula
For more guidance on the services of a Notary Public and the costs involved click here