1 The month in 1999 the property was bought and what it cost to buy. Is it jointly owned? - correction, moved-in December 2000, sole buyer, purchase price £410,0002 Assuming you moved into the property as soon as you bought it, when did you move out (month and year)? - moved out Nov 20123 When did the letting commence (month and year)? Has the property been let more or less continuously since you first let it. - First let Feb 2013, yes let continuously since then4 The value of the property now. - £900,0005 Would it be a possibility to sell the UK property whilst you were still living abroad? - Not desirable due to risk of triggering U.S tax obligation. UK employment contract begins 1st Oct.6 What was the reason for your move abroad? Were you sent by an existing employer or did you choose to move abroad? - sent by an existing employer
Sole owner. Different employer now, but transferring back to London with this current employer.
Thanks for the detailed explanation. I'm keen to understand the 'worse case' scenario whereby I am unable to demonstrate re-occupany for a month (feasible due to work travel commitments). Here is my interpretation:
Exempt gain £396,927 (£490,000 / 179 months x 145 months)
Letting period gain £87,597 (£490,000 / 179 months x 32 months)
Vacant period gain £5,475 (£490,000 / 179 months x 2 months)
Non exempt gain is £93,072 (£87,597 + £5,475)
Letting relief £40,000 (lesser of £40,000, £446,201 and £87,597)
Taxable gain £53,072 less annual CGT exemption £11,100 leaves a net taxable gain of £41,972 which at 28% = £11,752
You say you assume 1 month re-occuapny for the more favourable case, but what is the minimum e.g. 1 night? My paper trail - e.g. new UK employment contract - will lead to this address as it is presently my only property anywhere in the world. It would be unfortunate to trigger a CGT liability due to circumstances beyond my control. But I have to sell this property in order to be able to move-up the property ladder and I have my eye on a off-plan property (Nov 2nd occupancy) that I need to move quickly on or lose.
Great news! So I will pursue option 3 when completing my tax return and then be on solid ground with no vague interpretations of the tax code and be CGT free on this transaction. Thank so much for the clear and specific advice. This has been an excellent experience and great value for my money. I will be recommending TonyTax and JustAnswer to my network.