CGT and Inc Tax on previous main residence

[Legallois]

I bought my UK house in 2005 for £190,000. In 2007 I was posted by the civil service to France and remained there after my retirement in 2014, having kept the UK house as my main residence. In Dec 2014 I jointly bought a house in France with my French partner, declaring this as my main residence to the French authorities.

I am now thinking of letting the UK property from the end of this year and would like to know my position regarding CGT when I come to sell it in October 2020 as the interest only mortgage will then terminate. I am advised that the present value is around £260,000

I am also confused as to when I need to declare the rental income to the UK tax people. So far my income has never required self assessment and I have no income arising in France. The rental income will be £740.00 per month.


Any advice would be welcome, and thank you.

[maths]

I assume you will sell the UK property as a non-UK resident.

The UK now levies a non-resident CGT charge. In principle the charge applies to the difference between the property's market value as at 6 April 2015 and sale proceeds on sale.

As the property was at one time your sole/main residence then the gain attributable to the last 18 months of ownership qualifies for CGT exemption (ie period from 1 May 2018 to 31 October 2020).

For the period 6 April 2015 to 1 May 2018 the gain attributable to the period will only be exempt from CGT if for each tax year you spent at least 90 midnights in the UK property but as you are renting it out from end of 2016 it cannot from that date qualify as your main residence. However, lettings relief would be available.

[Legallois]

Thank you Maths, that's very helpful.