CGT liability on 'only' home

de1amo

İ live abroad and i am thinking of renting my place out in the uk--it is my primary and only residence in the uk.
i understand that i will pay income tax on the rent but will i pay CGT İf it ever rises in value and do they calculate CGT in such circumstances from the date i bought the place! 2003 in my case.

taxing

de1amo wrote: »

İ live abroad and i am thinking of renting my place out in the uk--it is my primary and only residence in the uk.
i understand that i will pay income tax on the rent but will i pay CGT İf it ever rises in value and do they calculate CGT in such circumstances from the date i bought the place! 2003 in my case.

You haven't really given enough information like:

• why you abroad
• when did you go
• how often do you come back to the UK
• will you live in the house again, e.g. when you (ever) come back
• did you always live in the UK before you went abroad

However, in brief if you are not living in the UK and don't intend to come back to live on a permanent basis (roughly spending 90 days or more in an UK tax year) then if you sell the house while you are abroad there is no CGT to pay as non residents don't pay UK cgt - provided HMRC accept that the UK is not ordinarily where you stay; they will accept that is your visits to the UK are less than 91 days each year on average and you have a permanent home in another country.

If you do want to come back to the UK and also want to sell the house before you come back then you must be more careful - you need to sell in the tax year before the one you are coming back in...say, you intend to come back on 31 December 2011 (that is in 2011/12 -- 6/4/11 to 5/4/12) so you have to sell before 6/4/11 being 2010/11 tax year (6/4/10 to 5/4/11).

There are also rules to catch out temporary non residents from avoiding tax this way (by nipping abroad for a couple of tax years and selling UK assets while abroad). You need to have been abroad for at least 5 complete UK tax years.

Even if you don't qualify for the gain being UK tax exempt, there are other reliefs for it being your home, and then added periods of exemption depending on the reasons why you were not living there, the last 36 months are always added to the time you actually lived in the house as an exempt period and, finally the lettings period gets you some tax exemption too but to a maximum of £40,000 of the gain but that can be less.

It is not an easy area to discuss on a forum and you should probably speak to a qualified tax adviser (a CTA or ATT member). If you sell the house while living in another country you will need to find out if you will have a tax exposure in that country.

Regards.