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Sam, Accountant
Category: Tax
Satisfied Customers: 14197
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I bought and lived in a house from jan 2012 to May 2013. I

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I bought and lived in a house from jan 2012 to May 2013. I then moved to the USA until May 2015 and let the property.
In may 2015 I returned to the UK and rented another property to live in.
My tenants will leave the house in Feb 2016.
I will sell the house when they leave.
Will I have to pay capital gains and if so for which period?
Hi Thanks for your question - I am Sam and I am one of the Uk tax experts. Can I ask whether you were sent abroad to the USA by a Uk employer or you found this work yourself, and why you did not return back to the property on your return to the UK? I can then advise the capital gain position Thanks Sam
Customer: replied 2 years ago.
I was sent abroad by a uk employer.
Upon return I tried to evict my tennants but they refused to move out.
Because i had nowhere to return to, I had to rent another property and I left them in the property.
I have now served them notice (again) but plan to sell the property instead and buy somewhere else
Hi Thanks for your response The fact you were unable to return to the property due to tenants refusing to move (which I imagine you could have further tried to legally enforce) may present a problem for HMRC allowing private residence relief for the whole period of ownership. However you will be relief for the time you lived there - and for last 18 months of ownership and also will qualify for private lettings relief, so may well have a very small (if not NIL) capital gain arising) and you also have the first £11,100 (this years allowance) tax free as this is the capital gains annual exemption allowance. The gain is calculated by the sale price less the purchase price, which forms the initial capital gain.From this initial gain you can deduct the costs to buy and sell, so stamp duty, legal fees and estate agent fees plus the costs of any capital improvements (such as a new bathroom or new roof etc Then the amount left over is considered for tax reliefs.First private residence relief, so the total months of ownership are calculated, from which the time lived there plus the last 18 months form an exemption (say owned for 100 months and lived there for 36 - then 36 plus the last 18 would be exempt - so a total of 54 months)So the calculation 54/100 months x gain would establish what is exempt. This is then deducted from the gain The gain that remains is then considered for private lettings relief, which is the lesser of1) the amount of gain on which private residence relief is due on2) the amount of gain left over after private residence relief has been applied OR3) £40,000 This is then deducted from the remaining gain, which leaves the final gain to consider. Even then the first £11,100 is tax free - so you may owe nothingBut if there is a gain left over then its either charged at 18% or 28% - this is dependent what your rate of tax is usually.So if a higher rate taxpayer than all the remaining gain at 28% of a basic rate taxpayer then what remins of the basic rate can allow 18% charge and any furtehr gain at 28% Let me know if I can be of any further assistance Thanks Sam
Customer: replied 2 years ago.
Customer: replied 2 years ago.
your response was fine but the request is still showing as awaiting response and I can't rate you. please check and I'll have a look back later.
Ok Thanks and I have now checked the box now so I can be rated Thanks Sam
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