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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I bought my house in London 2003 for £280,000 and plan to sell

Resolved Question:

I bought my house in London 2003 for £280,000 and plan to sell it on31 January 2016 for £550,000. I am a UK resident.
I lived in house all the time up until 22 Sept 2011 where I left and spent 75% of my time in Hong Kong and 25% of time in London (in my house) for the following 3 years. I was there to support my husband's work. This arrangement lasted until 22 October 2014 where I returned to live in the house in London full time. During the time I was living in Hong Kong, the London home was not nominated as primary residence. I did not let out the house to anyone during this period. I am not employed at the moment. Please could you tell me what the likely capital gains tax charge would be on disposal of this asset when it is sold in January.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.I will revert to you shortly with my calculations of your CGT position.In the meantime please advise date of purchase in 2003. many thanks.
Customer: replied 1 year ago.

Hello,

The date of purchase was 3/1/2003.

Thanks

Expert:  taxadvisor.uk replied 1 year ago.
Jacqueline, thank you for your reply and for being patient.The property has been your main residence for all the period of ownership albeit you spent some three years in Hong Kong when you spent 25% of your time in your UK home.The qualifying periods of absence include absences for whatever reason, totalling not more than 3 years in all.More information on private residence relief can be found herehttps://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-reliefBased on this information there will be no CGT payable as the whole gain is covered by private residence relief.Here is my calculation Sale of property£550,000Cost price£280,000Capital improvements£0Agents fees, solicitors fee and other costs - say£0Total cost price£280,000Gain on sale£270,000Period of ownership - months156Period as main residence - months156Private residence relief - months156(there is an additional relief to cover last 18 mthsof ownership (HS283 - example 9 ) - not applicablePotential capital gain£270,000Gain covered by private residence relief(156/156) x 270,000£270,000CGT payable- nil - 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.
Expert:  taxadvisor.uk replied 1 year ago.
More information on private residence relief can be found herehttps://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Hi,

Thanks for your reply.

I don't understand why you have put

Period as main residence - 156 months

same as ownership 156. London was not my main residence during Sept 2011 and Sept 2014.Why don't you account for the period in Hong Kong?

Please can you help me understand?

Thanks,

Jacqueline

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply...If you look at section Period of absence after Example 6, the property was your main residence before and after your period of absence and that your absence was not more than 3 years in all.I hope this is helpful.
Customer: replied 1 year ago.

Penny finally dropped! Thanks for your help!Smile

Expert:  taxadvisor.uk replied 1 year ago.
My pleasureI thank you for accepting my answer.Best wishes.