CGT on UK house sale

In message , Keith writes

Did you live in the house from Nov 00 - Dec 03?

There is apparently some exemption which applies if you've been away long enough, but I think it would need to be 5 years, so doesn't apply to you.

Your raw gain would be 105k minus the incidental expenses of acquisition (survey, legal, stamp duty) and disposal (marketing, legal). Call it 100k.

If this was your home from when you bought it until you left, you would be entitled to PRR on the first 3+ years and the last

3 years of ownership, which adds up to almost the whole period of ownership, and the short gap in the middle would be covered by LR. So -- nothing to pay!

If it was never your home, all you'd get is 6 years' taper relief, i.e. 20%. Then deduct the annual exempt amount of 9k and you'd be assessed on a gain of 71k.

Good answer,

By the way I am setting off to Edinburgh in an hour or so. Fancy a pint in the Sheraton Plaza?

John - yes i did live in the property from Nov 00 - Dec 03.

thanks

Thanks. I actually called the Inland Revenue and they said, because I was non-resident, I am except from CGT. 2 main criteria were:

- Liability will arise if the assets were used or held for the purposes of a trade, profession or vocation carried on in the UK through a branch or agency or by the branch or agency.

- Gains arising during a period of temporary non-residence may be chargeable (see paragraphs 8.4 - 8.6).

As i am non-resident (not temporary non-resident and don't use the property for point 1, I'm excluded.

Thanks again - really appreciate your inputs.

Sorry - just pulled this out from IR20 :

Gains by those who leave, or come to, the UK part way through a tax year

8.3 If you leave the UK during a tax year and cease to be resident or ordinarily resident in the UK, you may, by concession (extra-statutory concession D2), not be liable to capital gains tax on gains arising to you from disposals made after the date of your departure. However, if you leave the UK on or after 17 March 1998, you can qualify for this concession only if you were neither resident nor ordinarily resident in the UK for the whole of at least four of the seven tax years immediately preceding the tax year in which you leave the UK.

I think this means, i can't be resident in th UK for 4 out of the 7 years before I left the UK to be exempt from CGT. Strange rule, as of course i was not, i lived in the UK. So guess this means I am liable, now I'm confused!

. .

So, even if you were a normal UK resident, you'd pay no CGT on a the proportion of the 6.25 years of your ownership. the 'free' years are when you lived there (nearly 3 years) and also the last three years (becuase you did once live there). So 6/6.25 of the gain is not taxable anyway. Your taxable gain would be (0.25/6.25)*(245000-140000) = £4,200 You have £8,800 of CGT allowance. My guess is that there would be no CGT liability even if you were Uk resident. Even if you already used your £8,800, yo ustill have lettings relief to add in.

That's how I work it anyway, otehrs may correct me.

Robert

It doesn't not apply either.

The clock stops when he returns to the UK, not when the gain is made, so the status is currently unknown.

tim

Good to see you using the newsgroups again.

I assume that "I will resopond more fully when have the time" meant "I've been rumbled! Maybe he'll forget?".