Left UK in 09/2006 permanently- CGT liable?

by RP on Fri Aug 19, 2011 7:37 am

Hi all

If someone left the UK in Sept 2006 (permanently moved to Australia) and they were UK resident since birth (aged about 35 in 2006)

Is there still a liability to CGT if they now sell a property that was not their PPR which they acquired before leaving the UK around 2002?

I noted the 5 year rule (being liable to CGT if not out of the UK for 5 complete tax years when you return) but this only appears to apply to somone who returns to the UK or does it apply to ANYONE that leaves the UK?

Many thanks
RP

by **Peter D** on Fri Aug 19, 2011 8:37 am

The 5 year rule applies but it does not effect when you sell the property as long as you eventually remain out of the UK for 5 complete tax years and not return to the UK in the FY of disposal. However you will be liable to CGT in the for of IT in Australia. Australia will asses you on the 50% of the nominal gain and tax you at a rate depending on your level of salary. You will have to check locally. Regards Peter

by RP on Fri Aug 19, 2011 8:39 am

Thanks Peter for your swife reply

regards
RP

by RP on Fri Aug 19, 2011 8:39 am

Thanks Peter for your swife reply

regards
RP

by **maths** on Fri Aug 19, 2011 10:41 am

If you are British but have permanently left the UK with no intention of returning you might like to look into your domicile status so as to be clear of any exposure to UK IHT in the event of any lifetime gifting and/or death. First £325,000 taxed at 0%.

by **Alan Collett** on Tue Oct 25, 2011 5:37 pm

Just to add to the above comments: the Australian capital gain will be computed with reference to the market value of the property on the date the taxpayer commenced tax residence in Australia (assuming s/he did not first move to Australia as a temporary visaholder).

The resulting capital gain is discounted by 50% (as noted) so long as the property was held for more than 12 months after the commencement of residency; the resulting amount is added to assessable income for the year of disposal.

Note that if the property had been a main residence prior to letting - and no other property was owned - a 6-year CGT exemption might have been available as well.

Best regards.