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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I spoke with you on Friday, I have been travelling in SE

Resolved Question:

I spoke with you on Friday, I have been travelling in SE Asia for 15 months since August 17th 2016, I asked about CGT on selling my property and being considered resident. I own a second property which is let out that I recieve rental income from which I am not selling but keeping as my source of income and it has been let out since 2004. As for my property that I am selling it is my primary residence I haves lived their since 2004. I have a lodger there that pays £5400 per annum including bills and council tax. My brother owns half the property but he is in a residential care home, as he is deaf, dumb and autistic. So I don't think he will be entitled to PRR? Would my PRR still stand in this situation? With regards ***** ***** rental property what am I liable for tax wise. Being out the country a period covering part of 2 tax years. 15 months since August 2016. Am I to pay a higher rate of tax?how would it be paid? If I discuss this information with a bricks and mortar 'accountant, are they obliged to give information to HMRC? Would my CGT situation change if I was to commence work abroad, what is the rule for this? And lastly is there any time frame, I need to return by that would be beneficial to me, regarding tax?and CGT?
Submitted: 29 days ago.
Category: Tax
Expert:  bigduckontax replied 29 days ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

On what grounds do you consider your brother not being entitled to PRR. If this is his sole or min domestic residence ie he owns no other houses elsewhere, them PRR will most certainly apply.

Customer: replied 29 days ago.
Ok, good and the other points I raised.
Expert:  bigduckontax replied 29 days ago.

Rentals are invariably taxed in country of origin and you would have to seek relief through Double Taxation Treaties or Conventions..

Once you sell your sole or main domestic residence, then PRR will apply then a new PRR entitlement will be created in your rented out property as it will be the only house you own. Not that that will be of much use to you as you do not occupy save for the last 18 months of ownership when you are deemed to be in occupation even if this is not the case.

You will only pay the higher rate of tax if your income moves into the higher tax bracket. You would only get some relief from CGT were you to occupy job related accommodation and then for only 4 years.

Have I covered everything?

Customer: replied 29 days ago.
1.Just to clarify, does that mean on my rental income if all being equal I would pay the same rate of tax as previous years? Despite having been abroad. 2. Is their any time frame, I need to be back in the UK by that would be beneficial to me?i.e. Could I stay abroad for an extended period of time , let's say, over 18 months + and still receive PRR (is there a time period for being abroad that PRR would cease?)
Expert:  bigduckontax replied 28 days ago.

There is not, unless, of course, you acquire a new sole or main domestic residence overseas.

By the way, when you first left the UK dod you send a Form P85 to your tax office?

Customer: replied 28 days ago.
No I did not send P85 to tax office, I was unaware of this requirement and it was open how long I would be away for. What should I do about this?
Expert:  bigduckontax replied 28 days ago.

You should do so immediately quoting the date of your original departure. Fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. On receipt HMRC will make you non resident and you will find dealing with that Department much easier. Once so registered you may spend up to 90 days in the UK in any one tax year without breaching your non residential status.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 28 days ago.

Thank you for your support.

when you finally return to Blighty you should advise HMRC by letter,