Returning expat CGT on PPR

[Deleted User]

I have lived and been taxed abroad for 20 years.
I'm planning a return to the UK at some stage in the future but may not be able to sell my PPR for some time until after I do ( it's attached to a business which has been leased from us for at least 3 years).
My question is how long after I return to the UK will I be free from having to pay CGT on the sale of the property and would any CGT be based on the full sale price of the property or based on the length of time since I returned to the UK that it was no longer my PPR and an allowance given for the time when we actually lived there ?
Also in the years before I return and become tax resident in the UK I plan to spend time here renting property in various areas to decide on where we'd eventually like to end up.
What is the maximum length of time annually we're allowed to stay before becoming tax resident.
Many thanks in advance for any answers to a couple of questions I can't find answered clearly on the HMRC website.

QrizB

The gov.uk guidance seems pretty clear that there will always be CGT payable on the sale of a residential property that hasn't been your home for pretty much all the time you've owned it. You'll never be free from CGT.

Work out how much tax you have to pay

You’ll pay tax on your ‘chargeable gain’. This is your gain minus any Private Residence Relief you’re eligible for.

You get full relief for:

• the years you lived in the home
• the last 9 months you owned the home - even if you were not living there at the time

[Deleted User]

QrizB said:

The gov.uk guidance seems pretty clear that there will always be CGT payable on the sale of a residential property that hasn't been your home for pretty much all the time you've owned it. You'll never be free from CGT.

Work out how much tax you have to pay

You’ll pay tax on your ‘chargeable gain’. This is your gain minus any Private Residence Relief you’re eligible for.

You get full relief for:

• the years you lived in the home
• the last 9 months you owned the home - even if you were not living there at the time

Possibly confusion caused by me in my post but the PPR has been the foreign property I have owned and lived in for 20 years.I haven't owned any property in the UK for all that time.

mrschaucer

Surely you will pay any property taxes to the country in which the house is situated, rather than to the UK?

mrschaucer

And as far as tax residency is concerned, have you seen this page, and followed the links for more detailed info?
Tax on foreign income: UK residence and tax - GOV.UK (www.gov.uk)

scootar

Did you figure this out? We have a similar issue. We are moving back to the UK next year, and have a house in Australia which we will sell. Ideally, I would like to sell it as we leave rather than before we leave, as it will be a lot simpler... but will we be liable for CGT if the sale goes through once we are in the UK? Even though it is our primary residence/only home. You'd think there'd be a grace period while sales go through, but I can't see anything specific. All help greatly appreciated! 

bostonerimus

You will have to look at the relevant tax treaty between where the property is located and the UK. The general rubric in such treaties is that the country where the property is located can tax any gains and the country where you reside might also tax them and you need to determine who gets the tax and where to apply for a tex credit.

For the UK you need to see if you qualify for "Private Residence Relief". I think if you sell within 9 months of leaving the house you will qualify, but after that you'll pay some pro-rated CGT. 

[Deleted User]

mrschaucer said:

Surely you will pay any property taxes to the country in which the house is situated, rather than to the UK?

Not necessarily.  

Tassie_Devil

scootar said:

Did you figure this out? We have a similar issue. We are moving back to the UK next year, and have a house in Australia which we will sell. Ideally, I would like to sell it as we leave rather than before we leave, as it will be a lot simpler... but will we be liable for CGT if the sale goes through once we are in the UK? Even though it is our primary residence/only home. You'd think there'd be a grace period while sales go through, but I can't see anything specific. All help greatly appreciated! 

If you sell after you cease to be an Australian resident for tax purposes, you lose the CGT exemption.

https://www.bt.com.au/professional/knowledge-centre/client-strategies/investment-strategies/cgt-exemption-for-non-residents.html

[Deleted User]

scootar said:

Did you figure this out? We have a similar issue. We are moving back to the UK next year, and have a house in Australia which we will sell. Ideally, I would like to sell it as we leave rather than before we leave, as it will be a lot simpler... but will we be liable for CGT if the sale goes through once we are in the UK? Even though it is our primary residence/only home. You'd think there'd be a grace period while sales go through, but I can't see anything specific. All help greatly appreciated! 

I spoke to an HMRC advisor.
You will only get charged CGT on the time your home was no longer your PPR.
So if it took two years to sell your home after you move back to the UK you would only pay a percentage of those two years of any CGT liability.

bostonerimus

Deleted_User said:

scootar said:

Did you figure this out? We have a similar issue. We are moving back to the UK next year, and have a house in Australia which we will sell. Ideally, I would like to sell it as we leave rather than before we leave, as it will be a lot simpler... but will we be liable for CGT if the sale goes through once we are in the UK? Even though it is our primary residence/only home. You'd think there'd be a grace period while sales go through, but I can't see anything specific. All help greatly appreciated! 

I spoke to an HMRC advisor.
You will only get charged CGT on the time your home was no longer your PPR.
So if it took two years to sell your home after you move back to the UK you would only pay a percentage of those two years of any CGT liability.

Yes but you might not have to pay the UK CGT because of CGT due in the country where your home is situated. You must look at the relevant tax treaty. Don't pay HMRC taxes that you might have to claim back because you have to pay them in another country. It's far better to claim the tax credit than to get HMRC to refund you money.