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Sam, Accountant
Category: Tax
Satisfied Customers: 14157
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have a house in the UK and have been renting in Australia

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I have a house in the UK and have been renting in Australia where I am working at present. I have been there for almost 4 years. If I now selll my house in the UK, will I be liable for capital gains tax? I don't own any other property.

Thanks for your question

Could you advise
1) What day you left the UK to move to Australia
2) How long you you plan to remain in Australia
3) What visits have you made back to the UK since this move to Australia
4) Confirm that you have been declaring rental income to HMRC



Customer: replied 4 years ago.

1. I left in June 2010

2. At present my job looks pretty permanent so the reason we are considering selling the house in UK is to buy something in Sydney. Renting is very expensive.

3. We have been back to the U.K. twice on holiday to visit family.

4. Have not declared rental income because it has been very sporadic. Family members have occupied the house for a lot of the time I've been away.



Thanks for your response

Then as long as the sale takes place within a time frame that sees you treated as not resident in the UK, for a period of 5 years or more, then you will have no UK capital gains tax to pay.

However this sale should be reported to the Australian tax authorities as you will be remitting the money into their country and as an Australian resident fall under their tax jurisdiction.

And even if the rental income has been sporadic, these should have been declared to HMRC -so I would urge you to rectify this and in fact, as you are not resident - tax should have been deducted from the rents by the tenants/managing agents and paid over to HMRC (as you had not registered for the non resident landlord scheme) for you then to complete a self assessment tax return after each tax yea end, to declare the rents and any allowable expenses.

As a UK citizen you would still be entitled to personal allowances, so it may be, that due to the fact hardly any rent has been received, that there is no tax liability, but this still should have been reported to HMRC.
if you wish to take this forward - and alert HMRC to the position, do let me know and I would be happy to help guide you in the right direction of making a declaration. And you just need to ask for Sam tax in your opening post.



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Customer: replied 4 years ago.

Having had time to think about your answer - I am not entirely sure that I understand the first paragraph. Do you mean that I have to be out of the UK for 5 years or more before being treated as non-resident and therefore not subject to capital gains tax. In other words, should I delay selling the house until I've been away 5 years which will be June 2015.



Thanks for your response and seeking clarification.



No it means that as long as you remain not resident in the UK, for at least 5 years, during which time you sell the property, then it will not be subject to capital gains in the UK


Thanks Sam