Sale of house

[Yiannis17]

Hello

I have a situation whereby someone has become non UK resident from last year and living in the Middle East. He has just been gifted a house of which he now wants to sell. If he sells this house, is the a capital gains tax implication both being resident in the Middle East and if he were to return to the UK then sells it.

Thank you

[maths]

As a non-resident the disposal of a UK dwelling precipitates a non-resident CGT charge on any gain made. The rates are 18%/28% depending upon the marginal rate of income tax in the tax year. Tight deadlines apply to reporting the gain and the payment of any CGT charge. CGT may apply in the country of residence unless (as appears to be the case) no local taxes apply.

Rates of 18%/28% also apply to a disposal whilst UK resident but with less onerous reporting and payment conditions.

[Yiannis17]

Sorry what i didn't make clear after reading my post is that the house is based in the middle east. So whilst this chap has been out there he has been lucky enough to be gifted this house. So he wants to sell it and take the proceeds and return back here.

[darthblingbling]

He would likely be considered a temporary non resident, but if the asset was obtained during the period of non residency it should not be taxable under the non residency rules.

HOWEVER, if he sells as a UK resident, he will be liable to CGT as normal. So my advice is sell while a non resident and get some professional tax advice to ensure that he is definately a non tax resident or eligible for split year treatment; never assume you can simply return to the UK the day after the sale as we've had some clients do in the past!

[Yiannis17]

Thank you for your response. Assuming he become UK resident again, what would be the base cost of the house. What it not be the value when it is gifted to him?

[darthblingbling]

Likely market value at the time of gift