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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My son in law bought a house in England before he married my

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my son in law bought a house in England before he married my daughter , they went to Dubai to work , let the house, thinking they would return , on coming back they moved to Northern Ireland to be near family , I paid for a house in Northern Ireland for them to live and put it in my daughters name as the other house was in just her husband name.
With the change in capital gains , how would my son in law stand, as they need to sell the house to put their 5 children through University
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.
Hi. I'm not sure what you mean by "with the change in capital gains". Perhaps you can explain. Did your son in law and daughter live in the UK mainland house before they went to Dubai? Were one or the other of them sent to Dubai by an employer or did they go of their own volition?
Customer: replied 10 months ago.
Perhaps I should have made it clearer , they are both UK citizens , they did live in the house for a number of years before going to Dubai. I am not sure how they went to Dubai, they obviously had the interview in the UK , got a job , then went .
It was not a company that they had been working for previously that sent them over there.
The change in capital gains which I was mentioning was I understood that that the capital gains was being reduced , but not for a second house that is rented out. The question is related to ---is this counted as a second house , it is rented out at the moment , but is the only house my son in law owns, as my daughter owns where they are living at the moment , the intention was always to return to Norwich where the house is , but with family expenses due to five children, much lower wages in the UK they need to sell it to put the children through University.,
Expert:  TonyTax replied 10 months ago.
Thanks. Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 10 months ago.
I asked about how they had got to Dubai because there is a relief called absence relief whereby a property can be treated as an individual's man residence, even if it is let, if they go abroad to work. The property has to be occuiped both before and after the absence abroad. Take a look at the notes here and here for more information. As they have another house and a married couple can only have one main home between them for CGT purposes, an election for the UK mainland property would need to have been made within two years of the acquisition of the second in order to qualify for absence relief. Assuming absence relief is not available, your son in law will qualify for relief from CGT for the period that he lived in the property as a proportion of the whole gain. He will also be given the last 18 months of ownership as a tax free period. Furthermore, he will get letting relief up to a maximum of £40,000. Take a look at example 9 in HS283 here to see how these reliefs combine. As for the new CGT rates, take a look at the notes here ansd here. It's unclear what rates will apply to a property which has been the main residence and let but I suspect the higher rates will apply. In any event, a let property cannot be a main home when it is let unless absence relief is available. I hope this helps but let me know if you have any further questions.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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