This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Sale of main residence after period abroad and didn't return to the property

tax-bill
Posts:88
Joined:Mon Sep 14, 2009 12:22 pm
Sale of main residence after period abroad and didn't return to the property

Postby tax-bill » Mon May 22, 2017 1:20 pm

Couple purchased a house in Scotland in September 2001 and lived in it as their main residence from September 2001 to August 2007.
They moved abroad in August 2007 to work and returned to UK in August 2016. From 2007 the Scottish property has been let.
In February 2014 they bought a flat in London which was rented out till August 2016 when they came back to UK and took a job in London. They then stayed in this flat in London till March 2017 when they moved to a rented house in London and re-let the flat.
They are now thinking of selling their house in Scotland so as to buy a home in London.
Could the transaction incur any CGT liability.
Any feedback would be welcome.
Tax-bill

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Sale of main residence after period abroad and didn't return to the property

Postby maths » Mon May 22, 2017 2:26 pm

Presumably there are two vendors who are selling whilst UK resident and after leaving UK never returned to live in house?

If so, then ownership September 2001 to, say, sale September 2017 equals 16 years, 192 months.

PPR relief for September 2001 to August 2007 ie 72 months. Plus last 18 months ie 73.5 months.

Lettings relief for period September 2007 to, say, August 2017 equal to say 122 months (but restricted as per * below)

Thus:
Each person's CGT charge based on : [Capital gain/2] less [[73.5/192] x Gain/2] + [[73.5/192] x Gain/2]* + 11,300 (annual exemption).

tax-bill
Posts:88
Joined:Mon Sep 14, 2009 12:22 pm

Re: Sale of main residence after period abroad and didn't return to the property

Postby tax-bill » Mon May 22, 2017 4:10 pm

Maths
Thanks very much for your reply. Yours was my initial thoughts on the matter - however,
Why do you think that HMRC will not allow the years spent abroad to be taken into account when calculating the allowable years as "main residence"

Excerpt from GOV site:

If you have one home or you nominated your home
You get relief if you were away from it for:

any reason for periods adding up to 3 years
up to 4 years if you had to live away from home in the UK for work
any period if you were working outside the UK
You must have lived in the home before and afterwards, unless your work prevented you.

My query is - do they qualify under "any period if you were working outside the UK"
On return from abroad they set up home in London where the husbands new job (but with another employer) was. Therefore his work prevented them from returning to the Scottish property.
Is my attempt at logic flawed.
Thanks again

Tax-bill

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Sale of main residence after period abroad and didn't return to the property

Postby maths » Mon May 22, 2017 6:40 pm

Therefore his work prevented them from returning to the Scottish property.
If this is the case the period of absence should qualify.


Return to “Capital Gains Tax, CGT”