CGT as non-UK resident.

LJMCKENNA

Hi all

Thanks in advance if you're reading this and able to help.

Just been looking through the minefield of CGT to sell our UK property. Some very knowledgeable people on here so hoping to get some clarity on the matter.

Bought the property in March 2014 for 177,000GBP, we lived in it as a married couple until August 2019 (65months) and then rented it out as we emigrated abroad, the property is still rented out, current tenants are interested in buying it. Current market value 240,000GBP approx. I registered for self-assessment and we also got approved for non-UK landlord tax relief (not sure if this relevant)

Are we entitled to CGT allowance? Which part of ownership is it applicable to, i.e. when we lived in it or only whilst we've rented it out? Am certain we are not entitled to 'Letting relief'.

If we are entitled to CGT, do we get the allowance each as we are married and the property is in both our names?

Am I right in saying that estate agent fees, etc are deducted to calculate net Gain.

This the only property we own in the UK.

If any other information is required, I'll post as soon as I can.

Thanks again

Luke

[Deleted User]

The property is in joint names and so, Yes, two sets of reliefs. For EACH of you the gain is 120000 less purchase price less 88500 which equates to 31500. Deduct half selling fees (say 2500) and we have 29000. 

Sell in September and you will have owned the property for 90 months, 65 of which was your main residence. Add another 9 to this as it was your main residence at some point. So, 74/90 of 29000 is exempt leaving 5155 chargeable. However this will be covered by the 12300 to which you are both entitled. So - no tax to pay! Letting relief is long gone - not that you need it.

Might be worth checking the CGT position in your current country though.

Jeremy535897

It is more complicated than this. See:

https://www.litrg.org.uk/tax-guides/savers-property-owners-and-other-tax-issues/capital-gains-tax/capital-gains-tax
https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

Also have a look at the double tax agreement between the country you live in and the UK, and as pointed out above, the tax rules in your country of residence.

LJMCKENNA

Thanks for the information you have provided.

Am I right in saying that you can be liable to pay CGT again if you return to the UK within 5 years of original departure date from UK. (liable in the tax you return) There's lots of talk around being a 'temporary non-UK resident'.

From everything I have read so far, it seems we are only liable for gains on the period we have rented our property out for?? As it was our main residence before we rented it out, we will get 'Personal Residence Relief' for this? As long as we are entitled to the CGT allowance, we should be covered as we haven't made a massive gain to be honest.

We are resident in the UAE so its tax free out here so certain that there's nothing on that front.

Lagrange

Just wanted to add that you must report the disposal online using the UK property service by the 30-day deadline, even if:

• you’ve no tax to pay
• you’ve made a loss
• you’re registered for Self Assessment

As the  property was jointly owned, each owner must tell HMRC about their own gain or loss. 

There are financial penalties for not reporting within 30 days. 

Jeremy535897

LJMCKENNA said:

Thanks for the information you have provided.

Am I right in saying that you can be liable to pay CGT again if you return to the UK within 5 years of original departure date from UK. (liable in the tax you return) There's lots of talk around being a 'temporary non-UK resident'.

From everything I have read so far, it seems we are only liable for gains on the period we have rented our property out for?? As it was our main residence before we rented it out, we will get 'Personal Residence Relief' for this? As long as we are entitled to the CGT allowance, we should be covered as we haven't made a massive gain to be honest.

We are resident in the UAE so its tax free out here so certain that there's nothing on that front.

If you are not UK resident when you sell, you pay tax on the gain since 5 April 2015, as per the links I provided, subject to the usual reliefs (like main residence relief, but only from 5 April 2015). if it later transpires that you were a temporary non-UK resident, the gain is recalculated as if you were UK resident when you sold the property.