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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4809
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi I used to work in Dubai between 2007 and 2010 and purchased

Resolved Question:

Hi I used to work in Dubai between 2007 and 2010 and purchased an apartment. I then went to live in Sri Lanka for 2 years till the summer of 2012. I now need to sell the apartment and pay my ex in the divorce settlement. The total amount will be about £260k. I need to know what my position is in bringing this figure back to the UK to buy property? Approx £100k will go to my ex wife in the UK. Also the buyer would prefer to pay me through a UK bank transfer. Thanks David
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Please advise if the apartment has been your main residence at any point during ownership or is it an investment property?

What was the purchase price?

Many thanks
Customer: replied 2 years ago.

Hi the apartment was my main residence in Dubai while i was there. The purchase price was Approx £167k

Expert:  taxadvisor.uk replied 2 years ago.
David, thank you fo ryour prompt reply.

When you moved to Sri Lanka, was the propery let and if so please advise period let?
Is it still let?
Are you now back in the UK and UK resident for tax purposes?

Many thanks
Customer: replied 2 years ago.

I have been travelling and my wife stayed in the property. I am now back in the UK and will be a UK tax payer. My wife is back now and living in UK. I am starting a business (self employed). The apartment is empty and need to be sold as I am too far away to deal with renting it out.

Expert:  taxadvisor.uk replied 2 years ago.

David, thank you for your reply.

Based on information given, the gain would qualify for private residence relief as it was your main residence since 2007 and your wife lived in the property even when you were in Sri Lanka.

You have not stated if you bought another properrty on your return to the UK. You have up to 2 years from purchase of a second property to nominate which one is your main residence as you get PRR on one property at any one time.

Furthermore, the final 36 months of ownership qualify for additional relief whether you are living in the property or not provided it has been your main residence at some point over the ownership period. This will reduce to 18 months from 6 Apr 2014.

Although there appears to be a gain of (260-167) £93k it would all be covered by private residence relief and NO CGT payable. You can bring back the money into the UK. You will have to report the capital gain on your tax return

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.



Customer: replied 2 years ago.

Thanks for the advice. I am just wondering if i pay the £100k to my ex wife what the situation is? Will she have to pay tax? technically I gain nothing from my purchase price after paying her. Or is it better to show it all on my next tax return and then pay her as a side issue?

Expert:  taxadvisor.uk replied 2 years ago.
David, thank you for your reply.

As it is part of the divorce settlement then there is no tax payable.
You should show the gain in your next tax return. You don't have to report the distribution of proceeds from sale.

I hope this is helpful and answers your question.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4809
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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