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We moved to USA in May 2012, where we intend to stay. Sold the house in UK August 2013
Yes i was working in Europe for same UK Employer.
We did not live in the house we sold during any period since 2002 until sold.
We rented houses in Europe in Italy and Holland to live in whilst working in Europe.
OK, the US tax assistant is asking me about CGT as i need to file the US tax return, but need to understand what i will put on my uk Return when i get it in next few weeks.
Hi again.Provided you don't return to the UK permanently and re-establish UK tax residence within five full tax years of leaving, then you won't have to pay Capital Gains Tax in the UK on the gain you made from the sale of your UK home. As you left the UK in May 2012, your five full tax years started on 6 April 2013 so you should not become UK resident again before 6 April 2018. If you do become UK tax resident before that date, that part of the gain not covered by reliefs will be subject to UK CGT. If for some reason you did become UK resident before 6 April 2018, then part of the gain you made when you sold the property will be taxable. The gain will be treated as having accrued evenly over the entire period of ownership so it should be easy to work out the taxable and non-taxable parts.That part of the gain covered by your occupation of the property will be exempt from CGT as will the gain for the final three years of ownership. As far as your absence working and living abroad is concerned, so long as you did not have another property which would qualify for main residence relief, you would qualify for exemption from CGT for that part of the gain covered by that period if you had returned to live in the property at the end of the period in Europe which you did not. However, if you could not return to live in the property because your employer sent you elsewhere the absence relief would still be available. If you do not qualify for absence relief, then each part owner of the property will be entitled to a further deduction from the gain called letting relief which will be the lesser of:1 £40,000,2 the sum of the main residence gain and the gain for the last 36 months of ownership of the property and3 that part of the letting period gain not covered by the last 36 months of ownership.You would only need to call on absence relief or letting relief if you became UK resident before 6 April 2018.Take a look at the HMRC helpsheet HS283 here and at CG65030, CG65040, CG65046, CG65047 and CG65050 starting here for more information on main residence relief, letting relief and absence relief.As of now, you will have no UK CGT to pay which would be deductible from a CGT liability in the USA.I hope this helps but le tme know if you have any further questions.
OK I think I've understood.
No CGT to pay in uk unless i return before April 2018, which would then be based on a clac of how long we lived in the property whilst owned. etc
I wonder if the US will smash me on CGT instead? I will advise my Tax advisor here in US I am not liable for UK CGT uless I return to live in UK before 2018.
OK thank you. I will get the 2013/4 self assessment through the post as normal and will complete the extra pages for the CGT from house sale in Aug 2013.
But expect to pay nothing in UK.
But expect to pay in USA , unfortunately.