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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15933
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hi, I left the UK in November 2009 and have only been back

Customer Question

Hi, I left the UK in November 2009 and have only been back to the UK since then for a 2 week holiday. I have a property which I am considering selling prior to April 2015.
Would you be able to advise if I meet the criteria of being non-resident?
Looking at the rules (see below) I do not meet all 4 conditions as I do not believe I am resident in the UK in 2014-15?
Many thanks
Lee-Anne
For a charge to Capital Gains Tax (CGT) to accrue under Section 10A
TCGA 1992 all four of the following conditions must be met:
• the individual is resident in the UK for the 2014–15 tax year and is not
Treaty non-resident (this is referred to as the ‘year of return’)
• the individual was previously resident or ordinarily resident and not Treaty
non-resident at some earlier time before he became not resident and not
ordinarily resident (referred to as the ‘year of departure’)
• there are fewer than five complete tax years between the year of departure
from and year of return to the UK. These years are referred to as
intervening years
• the individual was resident or ordinarily resident and not Treaty
non-resident in the UK for any part of at least four out of the seven tax
years before the year of departure.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.

Hi.

A new set of rules on UK tax residency were introduced with effect from 6 April 2013. You can read about them in the HMRC guidance document RDR3 here. A more user friendly summary can be found here and there are some flowcharts you may find helpful here.

You left the UK in November 2009. Therefore, your five full tax year period started on 6 April 2010 and will end on 5 April 2015. You could have sold the UK property any time in that five year period from 6 April 2010 and, had you done so, so long as you maintain your non-UK resident status and do not return to live in the UK earlier than 6 April 2015, you would not have to pay CGT in the UK on any gain you made from the sale of that property.

If you sold the property between 6 April 2010 and 5 April 2015 and returned to live in the UK before 6 April 2015 after the disposal, then the gain would be taxable in the tax year of your return to the UK. This only applies to UK based assets bought before you moved abroad and would not apply to a UK based asset you acquired after leaving the UK and that you sold within the five tax year period even if you returned to the UK after the disposal and by 5 April 2015.

Clearly, as you have only had a two week holiday in the UK since you left, you are almost certainly non-UK resident. However, take a look at the documents I have given you links to and they should confirm your status.

As you know, non-UK residents will be liable for UK CGT on gains made from the disposal of UK residential property after 5 April 2015 whether bought before or after departure from the UK in November 2009. However, only the increase in value from 5 April 2015 to the date of sale will be taxed. In effect, the value of the property on 5 April 2015 will become the cost for CGT purposes. How main residence relief and letting relief, if applicable, that may have accrued before 5 April 2015 will be taken into account, if at all, remains to be seen and I expect there will be some transitional rules to give people a choice as to how their gain is calculated.

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 2 years ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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