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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4794
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have been non resident purposes since 1980 living

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I have been non resident for tax purposes since 1980 living and working in the Middle East. During the 2014-2015 tax year my circumstances changed and I spent more time in the UK. I have never filled in a tax return for the salary I was paid, while I was away and have always spent less that 90 days a year in the UK. I do fill in an annual self assessment for the property income that I receive from property I rent out in the UK.
During the 2014-2015 tax year I disposed of two properties one I had purchased in 1991 for £37 k and sold for £220 k the other was purchased in 2003 for £131 k and sold for £193 k. I did spend quite a bit of money upgrading and improving the properties over the years.
I understand that I should have advised HMRC at the time of the conveyances but did not. The property I purchased in 1991 was my home for a few years but then it was rented out. I never lived in the second house, it was purchased as investments.
Will I be liable for CGT and if so how much.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site.
Thank you for requesting I help you with your question.
Please confirm your stay in the UK has been less than 90 days in each tax year over the past 3 years.
Are you still a non-resident in UK for tax purposes?
When were the properties sold?
Were you a non-resident in the tax year the properties were sold?
Many thanks
Customer: replied 1 year ago.
Previous to last year I was within the 90 days last year I far exceeded the 90 days. I suppose I am resident now that I am retired but I have no income a part from that which my remaining rental properties produce. Both properties were sold during the tax year 2014-2015. I was resident last year when the properties were sold.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply. As both properties were sold in the tax year in which you were a UK resident for tax purposes the gains would be chargeable to UK CGT, I'm afraid. You say Property 1 was your home for a few years before it was rented out where as Property 2 has always been an investment property. Your gain would be the net sale proceeds less (cost of purchase + improvements supported by receipts etc + costs associated withbuying and selling) in both cases Relief and allowances against each property Property 1- Private residence relief available for the period theproperty was your main residence- Relief for final 18 months of ownership as the propertyhad been your main residence as some point during period of ownership- Letting relief up to a maximum of £40k per owner (if owned jointly) The balance would be chargeable gain and attract CGT at18%, 28% or a combination of both depending on your total taxable income in the tax year the property is sold. Property 2As the property was an investment property the whole gain would be chargeable to CGT. More information on private residence relief can be found here (hs283)https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief 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.I will be happy to perform some calculations if you were to let me know of the gain by property after taking into account (cost of purchase + improvements supported by receipts etc + costs associated with buying and selling) as a follow up to my accepted answer.
Expert:  taxadvisor.uk replied 1 year ago.
Just to add, you would be entitled to the gains annual allowance of £11k per owner before CGT is calculated.
Many thanks
Customer: replied 1 year ago.
Can you point me in the right direction so I can read up on the three relief's you mentioned for property one. How do I go about contacting you regarding the calculations. When I purchased property one back in 1991 it had been a squat.I spent £20 k on it putting a new roof on central heating and a new kitchen and bathroom. Those receipts have long gone. Does this mean I can't claim against this work. After all who keeps receipts for twenty four years.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.
As I professional, my advice to you is to have documentary evidence to support the improvements spend in the event HMRC were to ask for it. You may have to prepare some statement show expenditure by major expense/type.
If HMRC were not satisfied with explanations given, they would try to disallow the cost.
I had provided you a link to read HMRC helpsheet HS283 and it covers all reliefs available when you sell your property. Just click on it.
The thread to this question remains open even after the answer has been accepted.
I hope this is helpful.
Customer: replied 1 year ago.
Many thanks for your help. Should I decide to take this up a level and get you to prepare some calculations, how would I go about this.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.You can either put a fresh question and start all over again or I can offer additional service linked to this this question here.If you accept the offer then you can come back once you have some figures.I am sending you an offer for your consideration.If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4794
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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