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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My UK property is subject to a HS2 compulsory purchase

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My UK property is subject to a HS2 compulsory purchase order. I lived in the property from 2001 to 2007. Since then I have lived in Rep. of Ireland and let out my UK property. My total gain will be approx 230K in 2017 (estimated date). Am I liable to CGT in UK or Ireland? What reliefs am I entitled to against any liability?
Would it help to reinvest some of the proceeds in another UK property?

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Are you a UK national?

Customer: replied 1 year ago.
No. I am an Irish

I have to go out right now so do you mind if I call about 2pm please?. I will post my answer to the question here before I call.

Alternatively, I can opt out and leave the question and phone call to another expert.

Customer: replied 1 year ago.
Hi. Unfortunately I will not be available for a call until 3pm today

3pm would be fine.

Shall i call at 3pm?

Customer: replied 1 year ago.

OK, thanks.

TonyTax and other Tax Specialists are ready to help you

Gains made by non-UK residents on the disposal of UK residential property became liable to UK Capital Gains Tax with effect from 6 April 2015. Gains made up to 5 April 2015 were exempt from CGT apart from in cases where an individual who left the UK returned within 5 tax years.

The good news is that as a non-UK resident you can use one of three ways to calculate your gain. Probably the most advantageous way to calculate the gain is to use the 5 April 2015 value as your "cost" instead of the original purchase price. Take a look here and here for more information. You need to report the gain to HMRC within 30 days of the completion of the disposal or face an initial penalty of £100, followed by a £10 per day penalty for 90 days if you have not reported the gain within three months of the completion of the sale of the property. Further penalties then accrue. You can use the form here to report the gain.

I'm not an expert on Irish tax but I know you may have a liability to CGT in Ireland on the gain you make as you will read here. As the property was your main home, you will get a discount for that as you do in the UK. However, the UK CGT you will pay will be deductible from any CGT liability you have in Ireland. You would need to seek local advice on how to calculate the gain for Irish tax purposes.

I'm afraid that there are no reliefs in the UK that you can use to defer the gain apart from high risk investments made though the Enterprise Investment Scheme or Seed Enterprise Investment Scheme. There are really aimed at people who can afford to lose their investment.

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

Hi again.

If you look under the heading "Do I pay tax on any compensation?" here, it mentions rollover relief even if the old asset wasn't used in a business and the new asset is not used in a business. However, as you are unlikely to have a UK CGT liability, the relief is really of no use to you. I doubt that relief because of HS2 will be available in Ireland.