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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 8980
Experience:  FCCA FCMA CGMA ACIS
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In 2011, my wife and I purchased a UK property which is part

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Hello!In 2011, my wife and I purchased a UK property which is part commercial and part residential. At the time, we were both non-resident (residing in Serbia). The purchase price was £615k. The proportion of the property which is commercial is about 35% and the proportion residential about 65%. It is located in Hackney, London E8.In July 2014, my wife and I separated and my wife returned to the UK and became UK resident once again.I understand that the rules for CGT related to non-residents changed in April 2015.In Oct 2019 I returned to the UK and I am now UK resident.My wife and I are now divorcing and we will probably sell the property, which is currently valued at around £990k.My question is how to calculate the CGT we would each be liable to?I believe that from the date my wife became UK resident in 2014, still under the old CGT rules, she became liable to CGT on the gain in value from the date of her UK residence to the date of sale.And I believe I became liable to CGT on the gain in value from the date of the new CGT rules in 2015 to the date of sale.Am I right?How do we decide what the value of the property was when 1. my wife became UK resident in 2014 and 2. the CGT rules changed in 2015?My wife has taken advice from an accountant who appears to be of the view that the CGT would be charged for both of us on the full increase in value from the date of purchase in 2011 to the date of sale, which does not take into account our non-resident status at the time of purchase and for the following few years. Is that right?
JA: Have you talked to a tax professional about this?
Customer: No
JA: Anything else you want the Accountant to know before I connect you?
Customer: No

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

I suggest that your wife finds an accountant with a better grasp of UK Capital Gains Tax (CGT) rules than is currently being displayed.

As far as you are concerned, you are correct in the April 2015 base for calculating the gain. Your wife will be taxed on the full gain, but as it was a joint holding it will be half each.

Customer: replied 1 month ago.
Thanks very much for that initial advice. I’m new to this service, so not sure about next steps. I guess I have to pay you to have you answer all my questions. How do I do that? Thanks.

That happens automatically.

I would be pleased to talk, but from long experience I think you will find it easier to ring me. I am on 01750 725420.

bigduckontax and 2 other Tax Specialists are ready to help you

Delighted to have been of assistance.

Thank you for your support.