Capital gain tax

hoovercraft

Hi,
new to the site and to most of this topics.
Here my problem/questions.
My girlfriend and I bought a flat in May 2006 for £175K.
I then rent it out from October 2006 till present.
I am now going back to my country and I want to sell it. I am planning to sell it this summer, so having own it for about 2 years.
This is the only property I own.
The value of the property is now about £220K
Because I did not lived there much, will I have to pay the CGT anyway? I do get accommodation with my work, I run a pub, so there was no need for me to live there.
The mortgage was changed into a BTL one. I am paying interest only.Any help/suggestion/comment would be very appreciated.

Thanks
Antonio

morgani

you say you didn't live there much

Did you actually live there at all?

If so then you would be exempt as it will still be regarded as your PPR for 2 years after you last lived there.

If you didn't ever live there then you will have a gain for CGT purposes

hoovercraft

I bought the house in May 06 and only rented it out in October, then rented till now.
technically i could say I lived there for 6 months..... does it helps?

Also, I have read somewhere that for up to 3 years you can live outside the flat and rent it out if your job require you to live elsewhere without affecting the exemption.
True?

jimmo

Don’t try to claim that you have been living in the property if you haven’t. That’s fraud and there is a very good chance that the taxman already knows where you have been living because your employer has already reported it.
Take a look here

http://www.hmrc.gov.uk/helpsheets/ir283.pdf
The job related bit is on page 3.
Please bear in mind that from what you have said there seems to be a very good chance that you will qualify under job-related accommodation but your girlfriend may not. If you were joint managers then she will probably be OK but if you were the manager and she was bar staff or not employed by the pub owners, she won’t.
A wife would qualify but a co-habiting girlfriend won’t.
Also, if you are now going back to your country in this tax year, before 5April 2008 and sell it next tax year, 6 April 2008 onwards you are unlikely to be liable to UK Capital Gains Tax because you will be Not Resident in the UK at the time of sale.
However you are likely to be liable to your own country’s Capital Gains Tax and may really need to concentrate on what reliefs are available there.

hoovercraft

Thanks for the reply.
What would be then if I start living in the flat, lets say 4/6 months before selling it and I keep my UK residence? Would that qualify?
After all it is our only property.

PS which button do I press to thank people?

.......I needed to log in to be able........;)