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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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My wife and I are currently tax resident in Australia but

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My wife and I are currently tax resident in Australia but will be moving back to the uk in July. I have a house in Guernsey where I was tax resident from 2003 to 2012. The house is our family home and the only property we own, but we have been on secondment with work living in Sweden (2012-2014), Denmark (2014-2016) and now Australia (2016 to present), and during this period have been renting out our Guernsey home.
Once we return to the UK from Australia we need to sell our Guernsey home in order to buy a house in the UK.
Will we be liable for Capital Gains Tax?

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Key question, when you left the UK for Oz did you complete a Form P85 and send it to your tax office?

Customer: replied 1 month ago.
I haven’t been tax resident in the uk since 2003 when I moved to Guernsey. Don’t remember if I completed a P85 but I did have correspondence with the tax office to stop them sending me tax returns.

Well just to make sure, belt and braces, complete a P85 and send it in. There is no time limit as to its submission, it is available on the web and can be filed on line.

You will be liable to UK Capital Gains Tax (CGT) on the sale of your Guernsey residence, but only from an April 2015 valuation. However, as it is your sole or main domestic, Residence Private Residence Relief (PRR) will apply which relieves the tax at 100%. However, unless you have occupied this property for a minimum of 90 days in each tax year from the 15/16 year, the liability may still arise. Guernsey amended its tax law to correspond with the UK's in this matter.

I do hope that I have been able to set your mind at rest on this matter.

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Thank you for your support.