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Sam, Accountant
Category: Tax
Satisfied Customers: 14164
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am currently living on the Isle of Man, where I have been

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I am currently living on the Isle of Man, where I have been resident for over 25 years. I am considering returning to live back in England and be liable to UK tax. I own a number of rental properties on the Island, if I return to England still owning these properties will I be liable to CGT from the date of my return or from my original date of purchase

Thanks for your question and for asking for me.

As far as the rental income is concerned you will only be liable to tax on this income from the date that you return. But you should alert HMRC of this income by registering for self assessment - link here for you to do this

But for capital gain purposes when you sell, the gain will be treated as having accrued evenly over the whole period of ownership (so sale price less acquisition price) which forms the initial gain and from which can be deducted the costs to buy and sell (such as legal and estate agent fees and capital improvements) then the first £10,900 is tax free (as this is the current annual exemption allowance, which is due to increase to £11,100 from 06/04/2014) and then any remaining gain is liable to 18% or 28% or a mix of both.

The rate you pay capital gains is determined by what unused basic rate band you have left, and this will form the amount of gain liable to 18% with any remaining gain liable to 28% For example, an annual income of £30,000 sees there being £12,47 unused basic rate band - so after all the deductions from the initial gain, the first £12,475 would be liable to 18% and any remaining gain at 28%. And of course if your annual income is in excess of £42,475 then the gain left over is all liable to 28%.

let me know if you have any follow up questions on the above.


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