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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4807
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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everybody, I have bought a house in London January

Resolved Question:

Hello everybody,
I have bought a house in London January 2008 and emigrated in June 2010 from the UK.
I am still a non resident.
My plan is to Keep the property for the next 15 years.
New property gain tax rules come into Play 5th April 2015 and although non resident, I will be taxed on capital gains from that date onwards.
Apart from carrying out a valuation as high as possible around the 5th of April (to have evidence of high property value at the time), what can I do?
Does it help to Transfer my residential property into a Company?
I want to proactive and minimize this tax as much as possible for when I sell up in around 15 years.
Thanks for your advise
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

Your idea may sound right to you but you should be mindful of the fact HMRC would also have an idea of property valuation at 5 April through Valuation Office Ageny.

You should have maybe three independent valuations done of the property to fall back on in the event your base price at 5 Apr 2015 were to be challenged at a future date.

Transfer your residental property to a LTD company may not be a good idea. Transfer is effectively a sale and has CGT/ Stamp Duty Land Tax implications.

More information on stamp duty land tax on transfer of ownership of land or property can be found here

https://www.gov.uk/sdlt-transferring-ownership-of-land-or-property



On reflection, you may conclude it is better to leave the property in your name and pay CGT based on gain post 5 Apr 2015.

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 1 year ago.

Does this capital gain tax according to the new rules also take inflation into account? I mean it cannot be that I pay capital gain tax on i.e. 500 000 Pounds if half of that would be due to Inflation?

Do you agree that with the new rule, coming back to the UK would not make my Situation worse.

Thanks

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.

There is no adjustment for Inflation when calculating gain as it is based on actual gain.

The change made is to bring non-residents in line with residents who have a second property.

If you were to come back and make this property your home and live in it you would be able to claim private residence relief for all period the property is your main residence and letting relief but the gain would be based on your purchase price and not the valuation on 5 Apr2015.

Coming back may make your situation worse.. You would have to carry out some what if calculations to make comparison.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4807
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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