I purchased a property for my sole use in June 86. I moved abroad to work (Hong Kong) in April 2000 and now selling my UK property. Since leaving the country in April 2000 the property has NOT been rented out and has just been left empty. Am I liable for any CGT??
In addition I have a UK bank account, if I put the profit from the house into my UK account and earn interest do I have to pay tax on the interest earnt?
Thanks in advance.
CGT on selling UK property for a non resident
2 posts • Page 1 of 1
by santy on Wed Sep 15, 2004 8:58 am
Dear AKB
It does not appear that you will have a major issue with CGT. I say this because, from June 1986 to April 2000, it was occupied by you as your Principal Private Residence (PPR) and therefore, this is an exempt period for CGT purposes. If you were to sell it this month, then, the last 36 months of ownership the property is also treated as your deemed PPR, and therefore the only critical period is from April 2000 to Sept. 2001, as this only constitutes 17 months out of a total period of ownership of 220 months, it is unlikely that you will have an exposure to CGT, you will have available your unused annual CGT exemption of £8,200 (2004/05) and twice this figure if the property is held in joint names.
In the event that you actually come back to the UK and take up occupation of this property, then, for CGT purposes the whole period that you have been abroad due to work commitments, can also be treated as an exempt period for CGT purposes.
The other point to note is that if you stay abroad for five years and you sell the property whilst you remain a non resident, then, you fall outside CGT totally. As you left the UK shortly after March 1999, you are treated under the less favourable current rules on CGT as applicable to non residents.
The interest that is generated on a UK account is taxable as it is UK sourceed, however, you can arrange to receive it gross by notifying the bank that you are a non resident of the UK. Furthermore, as a non resident of the UK, you are still entitled to claim your personal allowance, such that for the current fiscal year, first £4,745 of bank interest is tax free.
I hope this helps.
Santokh Bains MSc (LSE)
07762 838 223
santokhbains1@aol.com
It does not appear that you will have a major issue with CGT. I say this because, from June 1986 to April 2000, it was occupied by you as your Principal Private Residence (PPR) and therefore, this is an exempt period for CGT purposes. If you were to sell it this month, then, the last 36 months of ownership the property is also treated as your deemed PPR, and therefore the only critical period is from April 2000 to Sept. 2001, as this only constitutes 17 months out of a total period of ownership of 220 months, it is unlikely that you will have an exposure to CGT, you will have available your unused annual CGT exemption of £8,200 (2004/05) and twice this figure if the property is held in joint names.
In the event that you actually come back to the UK and take up occupation of this property, then, for CGT purposes the whole period that you have been abroad due to work commitments, can also be treated as an exempt period for CGT purposes.
The other point to note is that if you stay abroad for five years and you sell the property whilst you remain a non resident, then, you fall outside CGT totally. As you left the UK shortly after March 1999, you are treated under the less favourable current rules on CGT as applicable to non residents.
The interest that is generated on a UK account is taxable as it is UK sourceed, however, you can arrange to receive it gross by notifying the bank that you are a non resident of the UK. Furthermore, as a non resident of the UK, you are still entitled to claim your personal allowance, such that for the current fiscal year, first £4,745 of bank interest is tax free.
I hope this helps.
Santokh Bains MSc (LSE)
07762 838 223
santokhbains1@aol.com
- santy
- Posts: 11
- Joined: Wed Aug 06, 2008 3:13 pm
2 posts • Page 1 of 1
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