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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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, I am tax resident in Switzerland and own a property

Resolved Question:

Hi,
I am tax resident in Switzerland and own a property in the UK (which I use as my residence during my trips back to the UK). I am looking to sell the property and purchase a higher value property in the same area. I have a mortgage on the property which I would like to transfer to the new property.
Please could you advise me on any CGT considerations I should be aware of?
Many thanks!
Martin
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me how long you have been tax resident in Switzerland please. Do you own a property there? If so, how long have you owned it? How many days do you spend in the UK in a full tax year? How long have you owned your UK property?
Customer: replied 2 years ago.

Hi,

I have been tax resident in Switzerland since January 2014 and prior to this, I was tax resident in Slovakia for 6 years. (I left the UK in 2007).

I do not own any property in Switzerland.

I normally spend approximately 40 days a year in the UK.

I have owned the property in the UK for 10 years.

Many thanks,

Martin

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 2 years ago.
Hi again.

If you exchanged contracts to sell your UK property by 5 April 2015, you would not have any liability to Capital Gains Tax in the UK because you are non-UK resident. That is, provided you have maintained that status since you left the UK in 2007. Take a look at HS283 here for more information on CGT and the main home.

As you will read here, from 6 April 2015, the UK government plans to subject non-UK residents to CGT on gains made on the disposal of UK residential property but only on the difference between the disposal proceeds and the value of the property on 5 April 2015. The detailed draft legislation will be published after the Budget next week and that should bring more clarity.

You may still qualify for full exemption from CGT even if the property was sold after 5 April 2015 due to the absence abroad provisions which you can read about in CG65030 to CG65050 starting here. As you will read in CG65046, both before and after your absence abroad, the UK property must have been your only or main residence and there must not have been another property which could have qualified for the main residence exemption.

I hope this helps but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15883
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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