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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Advise please on how much capital gains tax I will pay if I

Customer Question

Advise please on how much capital gains tax I will pay if I sell my UK home. I am currently a resident in spain. The only home I own is the one in the UK but I am not living in it for more than 6 months. I rent in spain.
Submitted: 8 months ago.
Category: Tax
Customer: replied 8 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  TonyTax replied 8 months ago.

Would you like me to try to deal with the question here first (I will need more information) or deal with the phone call first and thenm post the answer. Usually, I post an answer and then call the customer. Are you in Spain or the UK now?

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15840
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and other Tax Specialists are ready to help you
Expert:  TonyTax replied 8 months ago.

I will need the following information to answer the question:

1 The month and year you bought the UK property and what it cost to buy.

2 How long you lived in it before you started spending 6 months of the year living in it.

3 Has the property been let at all?

4 The property value now.

Customer: replied 8 months ago.
ok answers:1. Bought in June 2002 for 147,000 pounds sterling
2. 6 years living in it as my permanent residence whilst working at sea offshore
3. Yes on and off during the last 8 years whilst I have been based in Spain
4. 565,000 pounds sterling
Expert:  TonyTax replied 8 months ago.

Would you mind if I called you about 6pm today. I'm having trouble getting mobile reception and it would be easier to make the call from my landline.

Expert:  TonyTax replied 8 months ago.

Thanks for the information. Are you a tax resident of Spain? Were you paying UK tax when you were working offshore?

Customer: replied 8 months ago.
perfect thank you, ***** ***** the better.
Customer: replied 8 months ago.
17,376.00 spent on new boiler, bathroom, damp work and repairs.
Customer: replied 8 months ago.
Tony sorry is it possible to have an online answer before 6pm tonight?
Expert:  TonyTax replied 8 months ago.

I can do an online answer before then so you have something to look at but your tax residency situation will have an impact. I'll do the calculation on the basis that you are UK resident for tax purposes for the entire duration of ownership and we can discuss it on the phone at 6pm UK time.

Customer: replied 8 months ago.
Sounds good thank you Tony.
Expert:  TonyTax replied 8 months ago.

Can you give me some detail about the periods when the property was let please, ie the number of months it was let overall and when the last letting ceased.

Customer: replied 8 months ago.
A friend of mine was renting it up until 30th March this year. He was there for about 4 years. I can´t remember specific dates. He paid 265.00 a week rent. My mortgage is 865.00 a month.
I am very worried as I have not kept a log of dates. I haven´t done a tax claim in the UK since I stopped working in a full time position there 18 years ago. Since then I have worked offshore sailing and then in spain where I have have done a yearly tax declaration.
Customer: replied 8 months ago.
I stopped working in Spain in September 2014. I am now looking after my children at home and helping my partner with his business.
Expert:  TonyTax replied 8 months ago.

Thanks. I'll use 4 years to March 2016.

When you were working offshore, did you pay UK tax or were you treated as non-UK resident or were you visits to the UK such that you were treated as UK resident and paid UK tax on your offshore earnings? Did you work in Spain for 4 years and pay tax there?

Customer: replied 8 months ago.
I didn´t pay tax so think I was treated as an non-uk resident. I feel unsure of my status!
I have worked in spain for 4 years and paid tax.
Expert:  TonyTax replied 8 months ago.

Thanks.

I'm going to have to make some assumptions in my calculations which we can talk about later. I''ll do the claculations now.

Customer: replied 8 months ago.
Overwhelmingly complicated in my mind. Thanks Tony
Expert:  TonyTax replied 8 months ago.

I have to say this is a difficult one because of the uncertainty around your tax residence status. You might refer to HS283 here for information on the main residence and CGT.

If you sold the property in, say September 2016 for £565,000 you will make a gain of £400,624 (£565,000 - £147,000 - £17,376). By that time, you will have owned it for 171 months. Out of that, you lived in it for the first 72 months and it was let for 48 months to March 2016.

The gain covered by the first 6 years will be completly exempt from CGT since you were living in the property as will the gain for the last 18 months of ownership in any event.

Where you have worked abroad and been treated as non-UK resident, that period can be treated as a period during which you are deemed to have lived in the property and the gain covered by that period will be treated as exempt from CGT. If, however, you returned to the UK regularly during your offshore work period, then you would get main residence exemption for the gain covered by that period in any event. The same can apply to the period you have spent working in Spain even if the property has been let.

However, for the absence reliefs to apply, you must have occupied the property both before and after the absences, though not necessarily immediately before and after those absences.

Where absence relief isn't available, letting relief will cover at least part of any taxable gain.

I have done some calculations but I think it would be worthwhile waiting until I call you so that we can dicusss the matter in more detail before I give you some figures. There are a few points which would be more quickly clarified in a telephone conversation than by a text based chat.

I'll call you at 6pm.

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