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TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Advise on the tax implications / CGT on a UK property that I plan to sell? House bought

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Advise on the tax implications / CGT on a UK property that I plan to sell?
House bought in 2012, on UK residential mortgage. We then relocated to Spain in April 2014 and rented the house (via consent to let) for 12 months) The mortgage was higher than the rental income so no profit made.
We are now UK non-residents
We bought the house for GBP 337K and plan to sell for GBP 450k - will be liable for any tax and CGT?

Was the property your main home until you moved to Spain? Do you own a home in Spain?
Customer: replied 2 years ago.

Yes it was our main and only home. We do not own a home in Spain.



Leave this with me while I draft my answer.
Customer: replied 2 years ago.

Thank you Tony.

Hi again.

Up to 5 April 2015, a non-resident individual was not liable for UK CGT on gains made whilst they were non-resident and provided they completed at least 5 five years (where they left the UK after 5 April 2013) after they left the UK as a non-UK resident. From 6 April 2015, non-UK resident owners of UK residential property are liable to UK CGT on gains they make on disposal of the property but are able to claim some reliefs.

You have several choices as you can read here.

1 Provided you sell the property with 18 months of moving out, you will qualify for main residence relief for that part of the gain covered by your occupation of the property and for the last 18 months of ownership. Letting relief of up to £40,000 per part owner will be available for any period of gain not covered in the previous sentence.

2 You could take the 5 April 2015 value of the property as its cost for CGT purposes which will pretty much guarantee you will have no CGT to pay in the UK provided you sell it for close to that value. Each part owner will have a CGT allowance to cover the first £11,100 of their share of any gain over and above the 5 April 2015 value.

3 You can use the whole period of ownership and apportion the gain between pre 6 April 2015 and post 6 April 2015.

It seems to me that 1 or 2 above will ensure you pay no CGT in the UK.

I hope this helps but let me know if you have any further questions.
I have to go out now but will be back at my desk in about 30 minutes to answer any follow up questions that you may have.
Customer: replied 2 years ago.

Thank you Tony.

A follow up on point 2. As UK non-residents do we still have a CGT allowance? The house is in both myself and my wifes name so if the above is correct, we should have GBP 22,200 allowance to cover any house value increase from April 5th/6th 2015 to when we sell?

Who assigns a value to the house for the April 5th calculation?

Many thanks in advance

You still get a CGT allowance as a non-resident. Two owners gives you £22,000 in CGT exemptions. See the first example here.

You need to get a couple of reputable estate agents to value your property. HMRC may ask the District Valuer to do their own valuations post disposal so tell any agent you use not to be silly with their figures.
TonyTax and 2 other Tax Specialists are ready to help you
Thanks for accepting my answer.

The CGT exemption for 2015/16 is £11,100 so two of those gives you and your wife a total of £22,200.