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bigduckontax
bigduckontax, Accountant
Category: Tax
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I left the UK 8yrs ago and moved to singapore. i have a

Customer Question

Hi
I left the UK 8yrs ago and moved to singapore. i have a home in the UK which I have let out since i left. i am now moving back to the UK. i dont plan to live in that property. currently if i sell the property as a non-resident i only have to pay capital gains tax on any gain since April 2015. But what happens if i go back without selling? Will i suddenly go from having almost a zero capital gains tax liability to having to pay full capital gains tax on the whole gain if i sell once i am a resident? many thanks for your help in advance.
kind regards
Assan
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Assan, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You have the position correct with regards ***** ***** Gains Tax (CGT) as a non resident. Even HMRC recognise that you cannot dispose of landed property as quickly as a second hand car so you have 18 months in which to dispose of it before CGT rears its ugly head. You have an Annual Exempt Amount (AEA) of 11.1K and also Letting Relief (LR) up to 40K to offset any gain. With any luck you might escape CGT altogether. When you left the UK did you send a Form P85 to HMRC, or the Inland Revenue as it was then? If you did not you should do so immediately. Fortunately there is no time limit as to its submission, it Is available on the web and can be filed on line. On receipt HMRC will classify you as non resident. On repatriation you tell HMRC and they will apply the split year treatment; in the tax year of your return yours will be split into two portions, one non resident and the other resident. You will find dealing with HMRC much easier if you go through the P85 process. Don't forget that even as a non resident your net rental income is still liable to UK Income Tax (IT). If you are an EEA citizen you are entitled to the usual personal allowance, currently 10.6K. I do hope that I have shed some light on the position for you.
Customer: replied 1 year ago.
thank you keith. just to confirm are you saying once i become a resident again i have 18 months to dispose of the property before CGT kicks in? i filled out a P85 when i left.
many thanks
Assan
Expert:  bigduckontax replied 1 year ago.
Correct, for the last 18 months of ownership you are deemed to be in residence even if this is not the case. Private Residence Relief (PRR) is extended.
Well done Assan with the P85, you would be surprised at the people who don't and get themselves into the most awful difficulties as a result!
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Customer: replied 1 year ago.
many thanks Keith
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance.
Thank you for your support.