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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13944
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My wife and I bought our house in the UK in Feb-2001. This

Customer Question

My wife and I bought our house in the UK in Feb-2001. This was our only residence until my employer assigned me overseas from circa Aug-2010 to Sept 2013. From Aug-2010 to present, we have rented out the property and maintained a buy-to-let mortgage loan in the UK.
During my assignment I received a salary in the UK as I was employed on a home country tax equalized basis. My wife was unemployed for the period and had no income. At the end of the assignment, we moved ‘permanently’ to New Zealand and from Sept-2013 to present I have been employed on a local contract in NZ.
We have no current plans to return to the UK but will properly eventually return around retirement age.
We now wish to sell our home in the UK and buy a house in NZ with the proceeds. Can you advise how the sale of the property would treated in terms of calculating capital gains tax due in the UK HMRC?
Many thanks in advance
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.

Hi

Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

As you never returned to the UK and have decided to remain abroad, then you will not have exemption for the time you were abroad under the extended private residency rules, which allow up to four years as the proviso must be that you return back to the UK and either take up residence in this property OR move somewhere else in the UK due to geographical relocation of the same employer that sent you abroad. As this is not the case this is how the gain would be treated

UP until 05/04/2015 had you remained not resident abroad for a period of at least 5 full tax years, then the capital gain would not be liable in the UK due to non residency. And these new rules will over ride any normal review on the residency position and allowed private residence relief which would include the last 18 months of ownership.

However since 06/04/2015 the rules have changed - so you will only have a gain arising on the period 06/04/2015 to the date of sale, and I suggest that you arrange for 2 estate agents to provide a post April 2015 valuation

And then when you come to sell the property you must inform HMRC within 30 days - and I have added a link here that provides full instructions on how to proceed once the sale is final.

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

Let me know if I can assist further

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thanks Sam. To be clear then, the increase in value from 6-Apr-15 to sale date would be subject to CGT and the value on 6-Apr-15 is best to document via a couple local estate agent valuations ? I used the calculator on the link you sent which seemed fine until I reached the end when it just provided 3 different estimates of the CGT value and seemed to be asking me to chose which one (ranging from a very high CGT value to zero CGT value), does that seem right?
Expert:  Sam replied 1 year ago.

Hi

Thanks for your further question

Usually there can are three calculations provides full capital gains disposal (if you are to be treated as resident and based on total ownership) and then a second if private residence relief is due and the third based on the gain since 06/04/2015 (you should be given information supporting each calculation as to what it relates to)

So much will depend on how accurate the information was that you supplied with the questions

You can use local estate agents to provide a post valuation (I would recommend at least 2)

Thanks

Sam