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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4937
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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if i am not resident or domiciled in the UK do I still have

Resolved Question:

if i am not resident or domiciled in the UK do I still have to pay UK capital gains tax on sale of a property in the UK that was not my home at any time?
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Please advise if you are living in the UK or living outside the country?
If living outside the UK, did you ever live in the UK and if so, when did you leave the country?

Many thanks
Customer: replied 3 years ago.


Now living outside the UK. Spent less than 30 days in the UK in the tax year 2013/4, about 100 days in the tax year 2012/3 and resident in UK 2006-2012

Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your prompt reply.

As you left the UK on or after 17 March 1998 you would need to be not resident and not ordinarily resident in the UK for at least 5 full tax years between the year you left the UK and the year of your return to avoid being liable to capital gains tax.

Confirmation of this can be found under Q6 here

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/cnr/faqs_capgains.htm#cg1


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 3 years ago.


Based on the above, when did I cease to be UK resident? 2012?

Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your reply.

Rules governing residency for UK tax purposes changed from 6 Apr 2013.
Basically, if you do not meet any of the automatic overseas tests and you meet one of the automatic UK tests or the sufficient ties test then you will be deemed resident in the UK for a tax year and at all times in that tax year.

These are explained on page 8 of RDR3 here. In my view you are still UK resident for tax purposes in light of the new rules.
http://www.hmrc.gov.uk/international/rdr3.pdf

You may also find this flowchart helpful

http://www.blplaw.com/media/how-can-we-help-you/private-client/BLP%20Summary%20flowchart.PDF

 


I hope this is helpful and answers your question.

Customer: replied 3 years ago.


My spouse has a home in the UK, I do not own that property, but I did not spend more than 28 days there in the tax year 2013/4. In the tax year 2013/4 all other days were spent at my home in the US. I am a US citizen. In the tax year 2012/3, I spent about 100 days in the UK and the rest at my home in the US. Looking at the guides you mentioned I do not think that you are right that I am still resident in the UK. I think I may have been not resident as from 2012 but certainly from 2013. Can you let me know what the position is with the above further infromation?

Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your reply.

Based on information given by you you certainly do not pass the first and second automatic overseas test i.e.

First automatic overseas test

1.3 You were resident in the UK for one or more of the three tax years preceding the tax year, and you spend fewer than 16 days in the UK in the tax year. If an individual dies in the tax year then this test does not apply.

(you spent around 28 days in the UK in the tax year 2013-14)

Second automatic overseas test

1.4 You were resident in the UK for none of the three tax years preceding the tax year, and you spend fewer than 46 days in the UK in the tax year.

You mentioned your spouse has a home in the UK. I presume you have family tie and or accommodation tie in the UK. You have a UK accommodation tie if residential property:

- is available to be used by you as a place of residence; and

- is available for your use for a continuous period of at least 91 days in the tax year, and

- you spend at least one night in the tax year at that property

Based on above, I feel you are UK resident for tax purposes for year 2013-14.

I hope this is helpful and answers your question.

Expert:  taxadvisor.uk replied 3 years ago.
Brian, you will only be liable to CGT on sale of assets in your name.

If you are thinking of tax implications of CGT on gain arising from sale of property that is in your spouse's name, then you are not liable to CGT.

I hope this is helpful
Customer: replied 3 years ago.

This asset is in both names, a rental property. Agreed, on first and second automatic overseas test. We then move to UK tests? 1. not in uk 183 days, 2 have a UK home but spend less than 30days and have a US home so move to ties? only have two ties, spouse and home, so less than 90 days in uk still not resident? what am i missing?

Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your reply.

Let's consider your residency status for tax year 2013/14. You were UK resident for one or more of the three year before the tax year under consideration. You will have to go through the Sufficient Ties Test to determine your UK residence status for 2013/14.
I am of the opinion you are UK resident for this tax year.

As far as future years are concerned, you will have to consider your UK residency in light of Sufficient ties test for tax years 2013-14, 2014-15 and 2015-16.

More information on sufficient ties test is covered on Page 28 of RDR3.

I hope this is helpful.
Customer: replied 3 years ago.
How does the sufficient ties test capture me?
Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your reply...

The change in rules is relatively new. You have to consider these tests as you were UK resident in at least one of the three previous tax years.

I hope this is helpful.
Customer: replied 3 years ago.
I meant on what basis, I have two of the 5 ties and from what I see if I was in uk less than 30 days I am still not resident
Expert:  taxadvisor.uk replied 3 years ago.

Brian, with the change in rules, you can't regard in isolation less than 30 days as a basis for treating yourself as non resident as you have been resident in one of the three previous tax years.
I have provided you a link to HMRC guide on Statutory Residence Test

If you are not happy with my answer, I am willing to opt out and let another expert help you.
Please let me know.

Many thanks

Customer: replied 3 years ago.
I have looked at what you have provided and I am struggling to understand how you reached your conclusion. Working through everything you sent including the chart from BLP and from the above, we seem to agree that it comes down to the sufficient ties test. Do you agree? Looking at the ties test there are 5 yes? 3 apply to me in the BLP chart for 2013/4. The chart says leavers, days in uk 16-45 resident IF 4 ties. I only had 3. I need you to explain what I am missing if that is wrong. Can you help me to understand?
Expert:  taxadvisor.uk replied 3 years ago.
Brian, thank you for your reply.

It was my understanding that looking at 2 previous tax years you met 4 of the connecting ties with the UK. The connecting ties are

• Family Tie – whether a spouse/partner/common law equivalent or minor children are UK resident,

• Accommodation Tie – whether accessible accommodation which is available for at least 91 days and at least one night is spent there in the tax year, or if the accommodation is owned by a close relative, at least 16 nights there in the tax year

• Work Tie - whether more than 40 days’ work in the UK is undertaken (any day where more than three hours’ work is performed here)

• 90 day Tie – whether more than 90 days has been spent in the UK in either of the previous two tax years,

• Country Tie (applies to leavers only) – whether more days were spent in the UK than any other single country in the tax year

On reflection, it looks like there are only three as Country Tie does not apply, my apologies.

I hope this is helpful and answers your question.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4937
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 3 years ago.
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Best wishes.
Expert:  taxadvisor.uk replied 3 years ago.
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