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BANGKOK 17 January 2019 10:34
Benroon

Expat CGT clarification

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 Instead of being a lazy s0d I did search for the answers but the last time I can find this being discussed on here was 2014 before major laws were introduced so.....I understand CGT is now payable for expats from the UK who sell their houses (bought in to reign in the wealthy Russians I'm told but naturally it caught up all expats in the net)

 

However my searches blur the lines when the residence was your main home before you left.

 

So does anyone KNOW or even better experienced the actual facts ? So to give an example :-

 

Mr A buys a house pre rules so lets say in 2014 as a main residence and lives in it until 2018 and then relocates for more than 6 months to Thailand, keeping the main residence in the UK. If he then sells up is CGT applicable ? Either if he kept it empty or rented it for a few months.

 

Are there tax agreements between the two countries that affect this ?

 

Cheers

Edited by Benroon

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 Thanks for the reply 

 

ok so in this scenario - fed up with the UK you move to LOS leaving your main residence in the UK as a fallback.

 

After 6 months and 1 day (after  6 months you're not considered a UK resident right)- your property should you wish to sell presents you with a tax bill of 28% (CGT) of the gain between 2015-2018. Say circa £40k+ NET on your average UK priced house. Worse in richer areas.

 

Why would anyone choose to rent that house gaining rent which is going to take a long time to get close to covering that tax bill when the time comes to sell, rather than selling it and no tax bill at all. Just doesn't seem to make sense to me. I can only assume I'm missing something thus looking for more experienced/knowledgable heads who are here perhaps doing that.

 

The grey area I can't bottom out, is I know the rules came in in 2015, but if it was your main residence between then and now before relocating, is CGT still due for that time - its almost retrospective taxation.

Edited by Benroon

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8 hours ago, Benroon said:

After 6 months and 1 day (after  6 months you're not considered a UK resident right)-

Not sure if that is exactly the case for tax purposes unless you have informed the taxman you are leaving or left.........

Probably better to check here -

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

and examples here - 

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss#time-apportionment

Their is potentially Private Residence relief  -https://www.gov.uk/tax-live-abroad-sell-uk-home

 

One of those links had a calculator which I laboriously went through using fictitious numbers and based on your original dates suggested no extra tax was payable......

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Cheers for the time - I also found the calculator and like you arrived at £0. What throws doubt over that though is a statement in one of the other links that says unless you stay 90 days in your UK home - then you WILL be paying CGT for that year, and subsequent years.

 

Given its a fairly recent law change, I'm going to guess a fair few expats all over the globe renting their UK house could be in for a nasty surprise !!

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