I own a flat in the UK (outright, no mortgage), and I am planning to move to Germany (preferably Berlin, if that makes a difference). Given my limited knowledge of the area and of German laws, my current plan is to rent for a year and then sell the UK flat to raise money for a Berlin flat.

What are the tax implications of selling the UK flat and using the money to buy property in Berlin vs. putting the UK property on the rental market and using the income to rent a flat in Berlin?

Possibly relevant: I am British, and because of Brexit there is no guarantee I would be able to stay for more than two years (although as a software engineer, it is highly likely I would qualify for the Blue Card scheme).

(I'm assuming that I should ignore stories about the predicted future exchange rate because the most likely future values are already built into the current value, but if that assumption is wrong, do say — this is outside my area of expertise and I know it!)

Partial answers are welcome, if you only know about UK or German issues — I'll up-vote any answers that help.

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    Not experienced on German market, but note that you will have to pay capital gains tax for the period if you rent your UK flat, which given the current hyper low UK rental yields can make a huge dent in any rent profit if/when you sell. Renting from overseas is also very tough - a lot of the money will have to go to agents/builders for finding tenants and repairing the constant damage. Bad agents/tenants can destroy a property very fast and it is hard to spot from another country. – Philip Mar 20 '17 at 17:11
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    Silly question - will the capital gains tax be calculated on a pro rata basis (with 18 months exempt) if BenRW lived in it or is that only if he is a landlord resident in the UK? – nsandersen Mar 21 '17 at 11:17
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    @nsandersen Not 100% on this as not read up much on the nuances of overseas ownership. They have a calculator here which is pretty solid for working out any capital gain tax issues on houses: gov.uk/guidance/… where you can run through any permutations. – Philip Mar 22 '17 at 9:22
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    Capital Gains will only be liable on the capital gained while the house was not the OP's residence. They will only be liable on the gain it makes in the year or so that they are in Germany before selling... and there is a capital gains allowance of £6k/ year that will be offset against the gain. The OP should probably get a valuation before they move out or they will need to rely on the tax authorities decision about what the property is worth <now>. – matt Jun 2 '17 at 10:57

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