Heres a darn good CGT question !

Jeffinturkey

Hi all,

Myself and my wife (who is Turkish) have been living outside the UK
( in Turkey ) for the majority of the time since March 2005. ( Please
see table of Entry and Exit dates according to my passport.)

I own three properties in the UK which I bought over the last 15
years the last one being just 2 years ago. I have been renting out
the properties - properly declaring all income and expenses on my
tax return.

I now wish to sell one of the properties and have heard that I
should complete Form P85 and claim to be non-resident since 5th April 2005.

This seems reasonable since I have only spent 32 days in the UK
since that date.

Also I have not completed my 2005 – 2006 tax return yet on which I
can tick the box to say that I was not resident.

My work here is self employed as a website designer but I spent six
months training myself and only started earning a little money since November 2005.

I saw the IR booklet IR20 'Residents and non-residents' - chapter 2
- which has a section about Leaving the UK Permanently or
Indefinitly. Paragraphs 2.7 and 2.8

This seems to indicate that my work is irrelevant in my case - is that correct ?

Am also I correct in thinking that if I first apply to become not
ordinarily resident for my taxation then when I sell the properties
in a couple of months time I will NOT be liable for any CGT provided
I do not return for five years (except for a brief holiday). ?

Also given that my time in UK since March 2005 was only 32 days –
is the IR likely to except my claim of non- residence since April
2005 ?


Entered UK Left UK Time in UK Time Away Total
5-Apr-04 9-Sep-04 157 25
4-Oct-04 10-Nov-04 37 71
20-Jan-05 2-Mar-05 41 34
5-Apr-05 5-Apr-05
From 4/04 to 4/05 total in UK 235 130 365

5-Apr-05 5-Apr-05 81
25-Jun-05 27-Jul-05 32 252
5-Apr-06 5-Apr-06
From 4/05 to 4/06 total in UK 32 333 365

5-Apr-06 5-Apr-06

Still in Turkey - continually since 27 Jul 2005

I look forward to your comments.

Many thanks.
Jeff

Jeffinturkey

By the way - soory about the table - it looked fine when I posted it
Just needs some spaces.

Cook_County

Jeff

I assume that you have registered under the non-resident landlords scheme or alternatively your tenants are withholding tax before paying over the rent.

The CGT answer will probably be as you state. However I would strongly suggest professional advice on UK CGT and residence.

From what you say you remain domiciled within the UK while your wife is not, which gives rise to significant UK inheritance tax liabilities in the event of your death. I trust that your UK and Turkish Wills are designed to plan for this eventuality.

I assume you are also paying Turkish income tax on the UK rental incomes and familiar with the Turkish income tax payable on the sale of the UK property.