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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I wonder if you can guide me please? I am a UK/British

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Hi there, I wonder if you can guide me please?
I am a UK/British citizen, but am not UK resident and have not been since 1998.
I own 1 residential property in the UK, for which the mortgage will be fully paid within a few months. The property is probably worth around GBP220,000.
I complete an HMRC self-assessment every year, and have no arrears or credits with HMRC, and a fully clean tax record.
If I were to sell my 1 UK residence, would I be assessed for any Capital Gains Tax?
Submitted: 10 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 10 months ago.

Thank you for your question..

You say you have not been a UK resident for tax purposes since 1998.

There have been changes to CGT and residental properties owned by non residents wef 6 Apr 2015.

CGT is now chargeable on gains made by non-residents and this is fully explained here

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss

If you were to sell your property and it was your main residence at one point then you can either calculate the charegable gains using the old basis or

you can calculate your gain using the valuation at 5 Apr 2015 as your base cost (covered under rebasing).

The gain between 5 Apr 2015 and now may not be that high and it may be a better option.

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.

Customer: replied 10 months ago.
If I were to become UK resident again, during which time I sold the property, and then re-located again to overseas - I assume that no CGT would be due. Is there a minimum period of residency before one is considered again to be resident?
Expert:  taxadvisor.uk replied 10 months ago.

Thank you for your reply..

It is not as simple as that..

Total exemption applies you if had used the property throughout your period of ownership as your only and main residence. In that case you get private residence relief to cover the gain.

If there are absences then you have to perform some calculations to determine what period is covered by PRR etc. More information on this is covered in HS283 here

https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet/hs283-private-residence-relief-2016

If you move into a property with aview of making it your permanent home then as little as 6 months is sufficient but where you move in and out then you have to go through the exercise explained.

I hope this is helpful.

Customer: replied 10 months ago.
Very many thanks, ***** ***** helped me a lot with my initial thoughts on what actions to take. One final question please.It would seem that on average in the UK (there will be regional differences), that house prices between April 2015 and now have appreciated by roughly 8%. I believe that my property was not worth more than 220,000 in April 2015 - so +8% equals a gain of 17,600. As a British citizen, I am still entitled to an income tax-free allowance, which I assume is more than the gain or maybe marginally less?Capital gains tax for those within low tax brackets I expect is 24%? So even if my gain exceeded my tax-free allowance by 10,000 (which I doubt that it does), then my total tax liability from a CGT perspective would be 2,400.Is my understanding here ball-park correct?
Expert:  taxadvisor.uk replied 10 months ago.

Thank you for your reply.

Lets say your chargeable gain is £17,600 after costs of selling the property and agents fee (these are allowable costs in arriving at the gain).

Gains allowance is £11,100.. CGT payable on £6,500 at 18% is £1,170.

CGT rates can be found here

https://www.gov.uk/government/publications/rates-and-allowances-capital-gains-tax/capital-gains-tax-rates-and-annual-tax-free-allowances

I hope this is helpful.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4939
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Customer: replied 10 months ago.
That's excellent. Very many thanks for your assistance with this. We can close the conversation now. Have a great day ahead.

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