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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13869
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am in job-related accommodation and my wife and I have a

Resolved Question:

I am in job-related accommodation and my wife and I have a house in Guernsey which is let.
We are planning on selling the house in Guernsey, probably in the next six months, in the run up to my retirement which will be in two years time, and then buying one in England.
I understand that your own main residence is exempt from capital gains tax and that also applies to a house you own but don't live in whilst you are living in job-related accommodation...providing you intend to return to that home when the job comes to an end. Clearly we are not intending to return to the house in Guernsey as we are planning to sell it. Does that mean that the gain we make on the sale of the house will not be exempt?
Submitted: 11 months ago.
Category: Tax
Expert:  Sam replied 11 months ago.

Hi

Thanks for your response

Could you advise whether -

Is the Job related accommodation job still ongoing or due to cease

If due to cease where will you move to and why can you not return to this property

When did you leave this property to move into job related accommodation

When did you purchase this property and it was it always your main residence until leaving for the job related accommodation

Did you let out the property and if so has the rental income been declared to the tax office

Confirm that you live within the Uk tax jurisdiction now

Thanks

Sam

Customer: replied 11 months ago.
Hi Sam
Thanks for your quick response.
We bought the Guernsey property in 1993 and it has been our only and main residence until 1998 when we left it to come to England where I trained for the ordained ministry. Since completing my trying I have been in church accommodation. I am now the vicar of a church and will retire in two year's time at the age of 65.
When we left Guernsey we decided to keep the house as we fully expected to return to it on my retirement. However, we have now decided to live in England when I retire. We have let the house since 1998 until now. The tenants will probably move out in December or January when we will put the house on the market to sell it.
We could return to the house in Guernsey if we wanted to and, indeed, that was our plan for many years. It is only in the last couple of years that we have decided to settle in England.
I hope this covers your questions.
Ian
Customer: replied 11 months ago.
The rental income has been declared to HMRC and we are in the UK tax jurisdiction now.
Ian
Expert:  Sam replied 11 months ago.

Hi Ian

Thanks for your response and the additional information

Then as you have been abroad (be in though in the UK from Guernsey ) then the time you lived there plus 4 years plus the last 18 months/ total period of ownership will form an exemption (so in essence gain x 126 months/ 300 months

Plus you will be eligible for private lettings relief which allows up a furtehr exemption of £40,000 max

Then if the property is in joint names you each have an annual exemption of £11,100 and then if any chargeable gain remains, this will be liable to capital gains tax.

BUT IF you return to the property even just to sell - then the whole gain will be exempt as you live din job related accommodation for your work - so this is certainly worth considering to avoid any charge at all.

There is sometimes scope for you to be treated as fully exempt under these conditions of job related accommodation when you do not return to the property but this isi when an individual is relocated due to work (and not retirement) and therefore cannot take up the geographical located property.

Then resume life in the UK with perhaps a property purcahse along with the sale - or the ability to take your time with a purcahse at your leisure!

Let me know if I can assist further - or if you have all that need then it would be appreciated if you could rate me for the level of service I have provided (or click accept)

Thanks

Sam

Customer: replied 11 months ago.
Thanks very much for the advice. How long would we have to live in the property again for the whole gain to be exempt? Would we have to stay in it until it was sold? Or would one week do it?
Ian
Expert:  Sam replied 11 months ago.

Hi Ian

In this instance any time would do (unlike other capital gain situations) because for you to have this additional 3 years you just have to return to the property - but I would perhaps advsie stay at least until the property has been put on the market - so HMRC can see the intent to sell has been established

Thanks

Sam

Customer: replied 11 months ago.
Thank you.
Can you clarify what the 3 years refers to?
Expert:  Sam replied 11 months ago.

Yes

HMRC state that up to 3 years exemption (so additional private residence relief) can be given for time spent working away from the property in question - but you have to return back to the proeprty for this exemption to arise

Thanks

Sam

Customer: replied 11 months ago.
OK. I think my question now, therefore, is this...
To avoid CGT should we go back to live in the house after I have retired or could we spend a couple of weeks in it say next January while I am still working here?
Ian
Expert:  Sam replied 11 months ago.

Hi Ian

Thanks for your question

No you need to go and live in it after you have retired as already advised, its not enough to stay whilst still working ( as this would just be treated as a holiday!)

Thanks

Sam

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