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TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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There, I have a question please. My mother is a UK citizen

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Hi there,
I have a question please. My mother is a UK citizen and holds a British passport but has spent most of the last few years in Africa, coming to the UK for holiday. Recently, she was in the country for an extended period of time, from November 2014 - October 2015. She owns a property here in the UK which used to be the family home but is now on rent. She would like to sell this and buy a smaller flat to live in as and when she comes to the UK on holiday. What would be the implications when it comes to capital gains tax.
Thank you,
HelloEven as a non resident, your mother would be subject to capital gains tax on the gain if she sold the property.If you are a non-resident you pay Capital Gains Tax on the gain when you dispose of a UK residential property that isn’t your main home.Even if this had been her main home if she let it out, had long periods of absences, or used it for business, she will have to deal with the tax on the gain.She only has to pay Capital Gains Tax on her overall gain above her tax-free allowance (called the Annual Exempt Amount).For the period 6 April 2015 to 5 April 2016 the Annual Exempt Amount is £11,100.
Customer: replied 2 years ago.

Thank you for your response. Please clarify what period the overall gain refers to, does this mean that if the property has gone up, for example by £200k over seven years she would be liable to pay tax on £188,900? Also, how could one get around this? Would she need to live in the property for a minimum period of time? Thank you,

Yes, if the property increased in value from the purchase price or the market value ( if she owned it before April 1982 then market value in 1982 is used for the cost) she would pay tax on the difference in those amounts.If she is a non resident it may fair better for her. For disposals of UK residential properties by non-residents where they owned the property before 6 April 2015 the standard approach for calculating the gain is to use the market value at 5 April 2015.She doesn’t get tax relief if she hasn’t lived in it since 31 March 1982. If she were to move back into the property then she could claim some Private Residence Relief. No matter how many homes you own or where you lived at the time, you always get relief for the last 18 months before you sell your home.For example: she owned her home for 20 years and were away for 5 (25% of the time). The time she lived away wasn’t during the last 18 months or another period that qualified for relief. The amount of gain she would get relief on is reduced by 25%.
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