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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hello I AM a New Zealander living in the UK for the last 7

Customer Question

Hello I AM a New Zealander living in the UK for the last 7 years ,i had a share in a property in NZ before i even came to the UK ,My partners are wanting to sell so what would be the tax implications if i was paid out on my share of the property.
I inherited it in 2004. a 1/3 share
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me if the property was your main home during the period that you have owned a share in it please.
Customer: replied 2 years ago.

IT was my main home untill i got married here in northern ireland in august 2008 when or maybe a little later we purchased a home in belfast which then became my main home

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer. It will take a while so please bear with me.
Customer: replied 2 years ago.

not sure how to rate it but excellent so far

Expert:  TonyTax replied 2 years ago.
You don't need to rate my answer until I've provided one. Simply sit tight for now.
Expert:  TonyTax replied 2 years ago.

Hi again.

As the property was your main home ( by this I mean you have to have lived in the property) from when you acquired a share in it until August 2008, you will qualify for principle private residence relief for the period that it was your main home and for the last 18 months of ownership even though the property is not in the UK. If it was let, you will also qualify for letting relief. Take a look at HS283 for more information on the main residence and CGT. The appropriate portion (to reflect your share) of the value of the property when you inherited it will be your cost for CGT purposes.

As you are not UK domiciled, you have a choice as to how your non-UK source income and gains are taxed and these are as follows:

1 You can choose to pay UK tax on your worldwide income and gains as a UK national does. This is referred to the arising basis.

2 You can choose to pay tax on the remittance basis without making a formal claim if the non-UK income and gains in any one tax year are less than £2,000.

3 If the non-UK income and gains in any one tax year are £2,000 or more, you can choose to be taxed on the remittance basis but you have to make a formal claim for such treatment.

Please refer to Section 9 of RDR1 here for more information on the remittance basis of assessment. If you chose option 3 to avoid paying UK tax on any gain you make from the disposal of the property in NZ and you have been in the UK for 7 of the previous 9 tax years or 12 of the previous 14 tax years, you will be liable for the remittance basis charge of £30,000 or £50,000 respectively (increasing to £60,000). A new charge of £90,000 is being introduced for those who have been in the UK for 17 of the last 20 years.

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

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