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Hello Paul, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Thank you for asking for me.
Bad news I'm afraid; here is the relevant precedent [source: Gabelle, Expert Tax Support]:
'The First-tier Tribunal – in Elizabeth Moyne Ramsay TC01871 – published on 23 March 2012 – has disallowed rollover relief in relation to a property letting enterprise on the basis there was no ‘business’ being carried on. This is a significant decision. It suggests that what might previously have been identified as sufficiently active management may not, if fact, be enough.'
No, he will be liable for Capital Gains Tax (CGT) on any gain made less his Annual Exempt Amount (AEA) of 11.1K If he ever lived in the property before letting he may be entitled to Lettings Relief (LR) up to 40K also.
So he just has the AEA of 11.1K to relieve the gain plus any Portuguese Tax deducted under the Double Taxation Convention between the two countries which is allowed as a tax credit against any UK liability.
Thank you for your support.
And your kind bonus.