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TonyTax
TonyTax, Tax Consultant
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I own a house in the uk which was my primary residence for

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I own a house in the uk which was my primary residence for thirty years. In 2011 I moved to france and let out the uk property. I intend to return to the uk next april in order to sell the uk house and buy a smaller one. Do I need to live in the uk for a certain length of time in order to avoid paying capital gains tax?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Can you tell me why you went to live in France please. Were you sent by an existing employer or did you go of your volition?
Customer: replied 1 year ago.
We have owned the house in france since 2000 and used it for holidays. Having retired we decided to try living in france for 2 years to see if we enjoyed it. As we have now been here for over 4 years we obviously have. I pay taxes in France on my UK pensions and also submit self assessment tax returns for the UK.
Expert:  TonyTax replied 1 year ago.
Thanks. Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi again. From 6 April 2015, the rules for UK non-residents changed such that gains from the disposal of UK residential property after that date became liable to Capital Gains Tax in the UK. However, so long as the property is sold whilst the owner is non-UK resident, they can if they wish use the 5 April 2015 value of the property as their "cost" for CGT purposes as opposed to the original purchase price and expenses of purchase. That would mean that only the gain which has accrued since 5 April 2015 would be liable to CGT. Take a look here for more information as there several options for the taxpayer around this method. The problem with selling the UK property whilst you are living in France is that you may leave yourself open to a CGT charge there on any gain you make. If you look in HS283, you will see that if you sell the property when you are UK resident (and non-resident for that matter), you get exemption from CGT for that part of any gain you make over the whole period of ownership which is covered by your occupation of the property as your main home and for a maximum of the last 18 months of ownership when you were not living there. In addition, as the property has been let as well as having been your main home, you will be entitled to letting relief which can reduce any taxable part of the gain by up to £40,000 per part owner. See Example 9 in HS283 for a good example. It's difficult to gauge how long you would need to live in a property that you have moved away from after you moved back in before you completely exempt the gain from CGT because there are so many variables, ie sale proceeds, purchase price, period of ownership, occupation period and letting period. In additon, tax rules can and do change. I hope this helps but let me know if you have any further questions.
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Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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