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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Bought house in 2003 sold it in 2015 non

Resolved Question:

bought house in 2003 for 120k
sold it in 2015 for 205k
non resident for uk tax perpuses
has been let out for 12 years, not lived in by me
try to work out what CGT will be
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. Leave this with me while I take a look at it for you.
Customer: replied 2 years ago.

going to bed now please email result

thanks

Adrian

Expert:  TonyTax replied 2 years ago.
My answer will be here when you wake tomorrow.
Expert:  TonyTax replied 2 years ago.
Hi again.

As you will know, non-UK residents became liable for Capital Gains Tax on gains made on the disposal of UK residential property sold after 5 April 2015. If you exchanged contracts to sell the property by 5 April 2015, then you will have no CGT to pay in the UK as the gain will be exempt unless you return to the UK within 5 years of leaving if you left after 5 April 2013 or within 5 full tax years of leaving if you left by 5 April 2013.

Assuming that contracts were exchanged after 5 April 2015, you have a number of choices as to how to calculate the gain.

Given that you have never lived in the property and will not, therefore, qualify for main residence or letting relief, you will almost certainly be best off by choosing to use the 5 April 2015 value as your cost for CGT purposes, as opposed to the original purchase price. You can take account of the selling costs when calculating your gain. The first £11,100 of gains made by an individual in 2015/16 will be exempt from CGT.

There are two rates of Capital Gains Tax in the UK, 18% and 28%. The rate or combination of rates that you will pay will be dependent on the level of your UK source income that is taxable in the UK.

A maximum of £31,785 of the net taxable gain will be charged to CGT at 18% with the balance if there is any being charged to CGT at 28%. If your UK taxable income exceeds your personal allowance of £10,600 for 2015/16, then the excess will reduce the amount of the gain taxable at 18%. In effect, the amount of the gain taxable at 18% will be less than £31,785.

Take a look here for information on how gains made by non-UK residents can be calculated and the reporting requirements.. As I stated earlier, the default position would be to use the 5 April 2015 value as the cost for CGT purposes.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

my income and expenses for the year in england will be about zero

we believe the property has not increased in value since 5th april 2015

and my disposal cost will be about 4000 pounds when it completes in early december, do you think i will be due any Capital gains tax to pay

please advise estimated amount

thanks

Adrian

Expert:  TonyTax replied 2 years ago.
If the property is sold for no more than it was worth on 5 April 2015, there can be no CGT in the UK. You also have £4,000 of disposal costs as a buffer and the first £11,100 of any gains you make in 2015/16 will be tax free in any event.

You should ask an agent to give you a written valuation as at 5 April 2015.
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