Capital gains tax

Rubyminx

My partner and I own 2 houses between us.  1 in France and 1 in N.Ireland. We would like to sell the NI house which is our main residence before selling the French house. The French house is worth more money   We expect to pay CGT - if we sell the house in NI first, can we pay CGT on it and avoid doing do on the other property ?  

Hoenir

You may well be liable to French Taxes in any event. 

_Penny_Dreadful

Rubyminx said:

My partner and I own 2 houses between us.  1 in France and 1 in N.Ireland. We would like to sell the NI house which is our main residence before selling the French house. The French house is worth more money   We expect to pay CGT - if we sell the house in NI first, can we pay CGT on it and avoid doing do on the other property ?  

Im not sure why you think that would work. When calculating your CGT you can apply Private Residence Relief to a property for the time the property was your only or main residence. You say the NI property is your main residence so that is the property you’d apply PRR to, you can’t transfer PRR to the French property. 

Do you both own a share or both properties or do you each own one of the properties? 

Rubyminx

_Penny_Dreadful said:

Rubyminx said:

My partner and I own 2 houses between us.  1 in France and 1 in N.Ireland. We would like to sell the NI house which is our main residence before selling the French house. The French house is worth more money   We expect to pay CGT - if we sell the house in NI first, can we pay CGT on it and avoid doing do on the other property ?  

Im not sure why you think that would work. When calculating your CGT you can apply Private Residence Relief to a property for the time the property was your only or main residence. You say the NI property is your main residence so that is the property you’d apply PRR to, you can’t transfer PRR to the French property. 

Do you both own a share or both properties or do you each own one of the properties? 

We both own both properties. No mortgages on either. 

silvercar

Too late now, but if you are unmarried, within 2 years of buying the second property one of you should have declared that as your main residence.

Rubyminx

Thanks - the difficulty, as we understood it, was that one of us would have needed to work / pay taxes in France. 

Rubyminx

What would the situation be RE CGT if we sell the NI property then move to France permanently for a few years. Then sell the French property ? 

GDB2222

Rubyminx said:

What would the situation be RE CGT if we sell the NI property then move to France permanently for a few years. Then sell the French property ? 

 I doubt that UK taxes will apply. Do you intend to change your domicile? Do you have French citizenship? 

sheramber

Where do you intend to live once you have sold both ?

In UK, Selling the house you have lived in since you bought it does not incur any CGT.

As a UK resident you would be due to pay CGT  on the sale of the French property as it is not your ppr. 

If you  were no longer considered resident in UK for tax purposes, then there would be no UK tax liability when selling the French house. 

No idea on French tax situation. 

Bookworm105

it would appear you currently are resident in the UK for tax purposes

NI house is, by your own admission, your main residence. If that status has applied for the entire time you have owned it (I assume joint ownership, whether married or not) then no UK CGT applies to its sale.

For the French property:
a) if sold whilst still UK tax resident, it will incur CGT as it is not your main residence (it may also fall under French tax law if such applies)
or
b) if sold after your have changed tax residence to France, then it will fall under French tax law - whatever that is 

if you move to France before selling NI you have a 9 month grace period in which CGT private residence relief still applies to NI as you would be still subject to UK CGT in the tax year in which you left the UK. Take between 10 - 12 months to sell and you would incur a small CGT liability as PRR would not apply to those few months. Take longer than 12 months to sell and you are into the realms of non UK tax residency - which is an entirely different topic.

Rubyminx

We could sell the UK property easily within the next 9 months.
My partner is moving to France in early March and will work from there, paying French taxes. I will remain working in UK for at least 6 months and paying taxes here. I will live with family but move between the UK & France.
In 2-3 yrs, we plan to sell the French house and buy another, in one name only, in a different area of France.