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bigduckontax, Accountant
Category: Tax
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Hi, If I have a property abroad and sell it and make a profit,

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If I have a property abroad and sell it and make a profit, would I have to pay any CGT on it if (a) I'm a resident in the UK (b) if I'm not a resident in the UK and come back to live in the UK after the sale of property. For a couple, is the CGT allowance 10600 or 21200?
Hello, I'm Keith and happy to help you with your question.

The Annual Exempt Allowance for 14/15 is 11K per individual.

If you are resident in the UK and you sell a second home located overseas you are liable for CGT on any gain realised.

If you are not resident in the UK then the gain is not subject to CGT. However changes are in train to charge non-residents CGT. However the general rule according to the Society of Trust and Estate Practitioners is:

'Historically, non-resident individuals, companies and trusts have not paid CGT on investment gains from residential properties. However, things began to change last April, when the Annual Tax on Enveloped Dwellings (ATED) was introduced. At that point CGT became chargeable on personal-use residences (i.e. excluding lettings) worth more than GBP2 million if owned through a corporate envelope.'

So if property not over 2M, then forget it! Otherwise the gain for CGT is that made from a 6 April 2015 value. However, there is an existing UK law which taxes people who return to the UK within 5 years of the disposal, so beware. Whether this rule is applicable to retirees returning to the UK permanently is a moot point.

I do hope I have helped throw some light on your queries.
Customer: replied 3 years ago.

Hi Keith, Thanks for answering my question. To clarify the CGT allowances, if the property is owned by husband and wife, are the CGT allowances doubled to 11k x 2 = GBT 22k?



Yes, the husband and wife restriction is confined to Private Residence Relief, you can only have one between the pair of you. That is not the case here; each of you has an Annual Exempt Allowance of 11K.

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