Hi
Ok well having taken all the facts into account - I have done some calculations and this is the best case we can hope for
Assuming you own no property abroad -
Return to 57 Arlington - and stay there - its fine if you then subsequently sell (unless of course your return to the Uk was to be in a geographical area too far from this property - let me know if that,s the case)
Then the capital gain position for each of you would be as follows at TODAYS Date
Gain £410,000 (£850,000 less £440,000) less Capital Improvements £10,000 = £400,000
(Please note the costs to buy and sell such as legal fees and estate agents etc are an allowable deduction
But for each of you
Property bought Oct 2005 and to Aug 2016 property owned for 130 months
Peters main residence from Oct 2005 to Sept 2010 60 months plus last 18 months of ownership plus 48 for being abroad = 126 months
PETER £200,000 (half share) x 126/130 = £193846 exemption under the private residence relief (PPR) rules = £6154 gain
Then Private Lettings relief the lesser of 1) PPR which amounts to £193,846 OR 2) Gain left over after PPR has been applied - so £6154 OR 3) £40,000 as the lesser is the second calcualtion - the amount of gain left over after PPR has been applied = £6154 there is a NIL Gain arising
Carols main residence from Oct 2005 to March 2011 - so 65 months plus last 18 months of ownership plus 48 months abroad - max of 130 months
CAROL £200,000 (half share) x full exemption - no gain
So at this time to keep Arlington and move back in will produce a NIL gain for you both - but I appreciate that you may not return to 2018 but you can I am sure appreciate not only with the time of ownership lengthen so will the value - so I can only give you a snapshot in time as things are now, However as you we have NOT taken into account the costs to buy or sell OR utilised the full amount of private lettings due which can be up to a maximum of £40,000 AND we still did not use your annual exemption allowance for capital gains which amounts to £11,100 (current rate) for the year of sale, you have scope for the gain and to increase before a capital gain bill would arise.
We then have*****- I considered the implications of transferring it into your sole name - but as the profit made is smaller - to leave this intact is the most viable option IF you sell before you return - because then as non UK residents at the time of sale, and with the new capital gains regimes coming into play when non residents sell UK property - both of you will only be considered on the gain arising FROM 06/04/2015 to the date of sale (which would not be a massive amount) and you get the first £11,100 exempt - so working on an approx basis
Gain is £420,000 less £275.000 = £145,000 less capital improvements £20,000 = £125,000
Bought March 2011 and say sold April 2017 - total ownership 73 months
HMRC will be interested in the gain made from April 2015 to April 2017 - so 24 months
Gain £125,000 x 24/73 = £41095
PETER never lived there so £20548 less annual exemption allowances £11,100 = £9448 x (assume higher rate) 28% = £2645.44
CAROL same as Peters as the change of legislation would apply to you both even though you lived here pre April 2015 - so a total capital gain bill of (Max) 5290.88
If we made the full declaration of gain (so did not go by the new regime for non residents) then
Gain for each of you £62500 (as it would be on the whole period of ownership not just from April 2015)
PETER £62500 less annual exemption £11,100 = £51400 x 28% = £14392
CAROL £62500 x 21/73 = £17980 PPR = gain of £44520 less annual exemption £11,100 = £33420 x (Max) 28% = £9357.60
Total gain of £23749.60
And of course if you sell*****after you return to the UK then you WILL be charged as per this second example on the full gain.
Moving into Hall Court would not be the best way to mitigate capital gains - nor would selling both properties before your return -
Let me know if I can assist further
I am due to head out for a client appointment - but will answer any questions you have regarding my response on my return
Thanks
Sam