Choosing a new place to live is one of the most exciting parts of moving abroad. Just be careful not to rush into things. Before you start lining up multiple viewings, make sure you have a bullet-proof plan for your existing home.
Finances usually dictate whether you need to sell your primary residence in the UK or US to fund a new life overseas. But what if you don’t need to sell up? You might be tempted to hang onto your property until you feel ready to flog it. Or you could swap it for somewhere smaller and more manageable, which you could rent out for extra income or just keep as a base in your native land.
Whichever route you go down, there will be benefits and pitfalls, especially financial ones. Which is why preparation and the right professional advice are so important.
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Think about tax, currency and inheritance law
What you do with your existing home will be pivotal to the speed and stages of your move abroad. It has the potential to affect timescales, cash flow and the overall logistics of relocating.
As with anything property, there will be tax implications to consider, not forgetting you’ll be changing tax jurisdiction when you move. Understandably, you’ll feel an emotional tie to your home, which may hold lots of family memories. But don’t let that blur what is best for you financially and practically.
Give some thought to currency too. Any property you keep in the UK or US will be valued in sterling or dollars respectively, as will any rental income generated by it. How will that fit in with your broader financial plans? Meanwhile your new local currency will be euros (if you’re in a Eurozone country), so exchange rate movement will affect values and potentially your income.
Equally, your decision could be influenced by inheritance law or IHT tax rules. This is especially relevant for British expats since April 2025 when the UK changed from a domicile to residence-based system when assessing IHT liability.
Get professional advice early
If you do anything after reading this, have a conversation with a cross-border wealth management and tax specialist. They will present your options and highlight the financial implications of each.
Properties are not liquid assets. Transactions take time, involve lots of paperwork and are not easily reversible. Making an ill-considered decision now could be costly, stressful and taint the excitement of your new life abroad.
Sell your home before you move abroad
Most people moving abroad permanently cash in before leaving and put the proceeds towards their new overseas home. Selling before moving makes things straightforward logistically.
It is also simpler from a tax perspective as you’ll still be tax resident in the same country as the property. Which means you’ll avoid the need for any cross-border tax reporting and know exactly what your exposure is at point of sale.
Minimise capital gains tax
Thanks to Principal Private Residence (PPR) relief in the UK, so long as you’re still a UK tax resident when you sell, you’re unlikely to have any capital gains tax (CGT) to pay. Still, take care with timings and bear in mind different tax years. Due to the 183-day rule, you could be deemed tax resident in your new country the same year you sell if you move there in the first half of the same calendar year. This could have retrospective tax implications. Moving in the second half of the calendar helps overcome this.
Make yourself a ‘serious buyer’
Ideally, you’ll have completed or at least exchanged contracts on the sale of your old home before viewing any overseas properties. It makes you ‘buyer ready’ and means you can act fast to secure a property you like.
Remember, demand from international buyers makes property markets highly competitive in popular expat areas. Overseas agents will prioritise buyers who have the money in the bank or mortgage in place to complete a purchase quickly. Vendors are less likely to accept an offer from a buyer reliant on selling another property to be able to complete.
That said, it’s never too soon to start researching the property market where you intend to move. By browsing our country listings, for Spain, France, Portugal and all key countries, you can get an idea of prices and availability in different areas. When you’re ready to take the next step and view properties, we can connect you with suitable agents.
Re-invest the equity
When you emigrate, your property becomes more than just a home – it becomes a financial asset within an international tax context. It often makes financial sense to sell and invest the equity in a more tax-efficient structure that will bring you better returns.
Sell your home after you move abroad
Whether by preference or unwillingly, some expats end up selling their former home only after they’ve relocated. While it might take the pressure off you during the moving process, there could be financial repercussions.
Generally, tax reporting becomes more complex too. By the time you sell it is highly likely you’ll be deemed tax resident in a different jurisdiction to where your property is, making it a more long-winded cross-border process.
Exposure to CGT
As you will no longer be living in the property, it will deemed a secondary property and not your primary residence. Since April 2015, all non-UK residents have been liable for CGT in the UK on the sale of a residential property there – before this they were exempt after living abroad for five consecutive tax years.
Equally, as a tax resident in your new country, you’ll likely have worldwide tax reporting obligations and could be liable for CGT on the sale there too. The good news is double tax treaties should mean you won’t pay any tax twice – typically you would pay it in the UK and credit this against anything due in the other jurisdiction.
You may be eligible for exemptions and deductions. The UK offers an exemption period for the final nine months of ownership and levies CGT on periods that you don’t reside in the property (as opposed to the full period of ownership).
Keep a property in the UK when you move abroad
Perhaps you don’t want to cut all ties with your mother country and would like to maintain a financial anchor there. If this is you and your home is lettable and easy to maintain, it would make sense to hang onto it. If it is a large family home that requires a certain level of managing and is costly to run, you may choose to downsize.
The UK and US markets are comparatively robust. For expats, especially in those countries with less robust economies and currencies, properties there remain attractive and safe assets to hold. The prospect of capital appreciation is another reason to keep a property. It also offers protection from being outpriced of the UK or US market if you did ever have to return home.
Renting out your UK property
Keep in mind that owning a rental property in the UK brings management responsibilities and you’ll need to keep on top of increasing regulation. Typically, you will need to find and put your trust in a management agency to handle your tenants and day-to-day maintenance issues. You’ll need to factor in their fees when calculating your return.
Being an overseas landlord raises cross-border tax reporting obligations. You’ll need to register with HMRC’s Non-Resident Landlord Scheme and file an annual return. Assuming there is a double tax treaty, UK income tax paid on your rental income can be credited against any liability in your country of residence. For transferring your rental income into your new local currency, engage the services of a currency transfer specialist, such as Smart Currency Exchange.
Inheritance plans when you move abroad
You will also need to think and take advice about inheritance planning. Check on any issues regarding succession laws. Remember too, your UK property will remain within the net of UK inheritance tax until you have been non-resident a certain number of years. This could affect your longer-term plans.
What to do next
Ready to put your plans to move overseas into action? Get in touch with the team at Your Overseas Home. One of our specialists will chat through your plans and connect you with an affiliated specialist to help you plan your property purchase and move abroad in the most appropriate and tax-friendly way.
Note, information in this article is provided for general informational purposes only and does not constitute formal advice. Always seek professional advice before making decisions relating to estate planning, inheritance and other related matters.
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