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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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i own 40% shared ownership apartment that I have purchased

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hi i own 40% shared ownership apartment that I have purchased through a mortgage back in sep 2006. i have managed to rent it out below market value to cover my bills as i moved overseas for work. I am currently planning to sell my share and I would like to find oput if i have any liability for any taxes. thank you

Was the apartment ever your main home? If so, were you sent to work abroad by your employer or did you choose to move abroad? When did you leave the UK? Do you own or have a long lease on a property abroad? Who owns the other 60% of the property?
Customer: replied 3 years ago.

yes it was my main home. my company has sent me to Dubai initialy for 1 year then extended my contract to unlimited. I'm now fully settled since 2007.

my husband and i live in a rented property in dubai with our 2 children and the 60% share is owned by Noting Hill housing group.


Leave this with me while I draft my answer.

Hi again.

Take a look at the text between Examples 6 and 7 and Example 7 itself here.

As you will see, provided you occupied the property before you left the UK and you re-occupy it if and when you return to the UK and you don't own another property which could be your main home, you will not have to pay CGT on any gain when you sell it.

Up to 5 April 2015, if you were non-UK resident, you could sell a UK property and pay no CGT. However, the rules have changed with effect from 6 April 2015, assuming the relevant proposed legislation in the Finance Bill 2015 is enacted.

From 6 April 2015, non-UK resident owners of UK residential property will be taxable on a gain from selling it but only on the difference between the 5 April 2015 value (which effectively becomes your cost for CGT purposes) and the disposal proceeds. If you sell the property soon, therefore, you should have little or no taxable gain. Take a look here for information on the proposed new rules. There are provisions as I thought there would be for owners to use the whole period of ownership to calculate the taxable gain if it is to their advantage but if you wish to sell now, those provisions probably won't be relevant to you.

I hope this helps but let me know if you have any further questions.

Customer: replied 3 years ago.

thanks very much for your response. would you please clarify one more thing. if I sell my 40% share right now which means that I am not living in the property or returning to it do I have to pay tax from the 6th Apr 2015 till date of sale completion? thank you vm!

That is correct. The alternative woild be to use the whole period of ownership and see if that produces a better result for you. Assuming you don't move back in, you won't qualify for absence relief but will qualify for lettinbg relief. As I said earlier, if you sell very soon, your property is unlikely to have increased in value that much if at all.

What with the UK general election taking place in under a month, some of the proposed tax changes won't happen due to the "wash up" which is where the political parties agree to push through some bits of new legislation and scrap other bits in advance of an election. However, I don't envisage the bit that affects you will be scrapped as it will raise money for the Treasury.

You will be entitled to an exemption for the first £11,100 of gains you make in the 2015/16 tax year so, unless your property value takes off between 5 April 2015 and when you sell it, you probably won't have any CGT to pay.

What I suggest you do is come back to this question once you have sold the property and I'll update you in light of the final set of new rules. You can continue to access this question even after accepting an answer.
Customer: replied 3 years ago.

i would like help with filing my tax return. would you be able to? can I instruct you to please? I'm hoping to put my 40% share for sale before end of this year and really need to be on top of my taxes and in line with the that something you would help with? thanks a million for your time and help.

I'm not allowed to take clients on through this site unfortunately.

However, when the time comes to complete your tax return, I'll be happy to guide you through it from here. Unfortunately, as you are non-UK resident, you cannot use the HMRC software to complete the residence pages which you may or may not have been completing.

I may be able to offer you some telephone guidance if that would help but as you only have rental income to disclose, it should be straightforward. You would need to start a new question, asking for me. When do you envisage completing your 2015 tax return?
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