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Where Taxpayers and Advisers Meet

Moving abroad - selling house

zebulon
Posts:2
Joined:Fri Feb 09, 2018 12:09 pm
Moving abroad - selling house

Postby zebulon » Fri Feb 09, 2018 12:19 pm

Hi

My partner and me (both EU citizens) are joint owners of a house in the UK. This has been our main and principal home since 2014 and has never been let or used for profit. I am due to move to Germany end of May where I will have a permanent job from 1st of June. My partner could join me at a later date. We would like to sell our house and are unsure about the rules where CGT is due. I read on the HMRC website that UK residents were not taxed on their main home sale, but one has to stay for 90 days after the beginning of the tax year? Does that mean that to avoid paying CGT my partner should stay until 7th of July and sell after this date? Or am I misunderstanding the law?

Thank you very much in advance for your advice and insights.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Moving abroad - selling house

Postby pawncob » Fri Feb 09, 2018 4:15 pm

Assuming you are UK resident for tax purposes, then any gain will be exempt as it's your PPR.
Can you post link to HMRC advice?
With a pinch of salt take what I say, but don't exceed your RDA

zebulon
Posts:2
Joined:Fri Feb 09, 2018 12:09 pm

Re: Moving abroad - selling house

Postby zebulon » Fri Feb 09, 2018 4:29 pm

Hi, thanks for your answer.

https://www.gov.uk/tax-foreign-income/residence
https://www.gov.uk/tax-live-abroad-sell-uk-home

This is where it becomes confusing. I have been UK resident (and tax payer) for 17 years. When I leave in May, I understand I'll have a split-year treatment. But the residency test mentions 90 days after the beginning of tax year, which is 7th of July. So technically for 2018-2019 I will not be considered as resident. Still, this contradicts the paragraph on split year. Furthermore, I also understand I should have PRR on the home sale, since this is my principal residence, but it looks it is contradictory with the 90 day rule. Can someone clarify here please?

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Moving abroad - selling house

Postby pawncob » Fri Feb 09, 2018 4:59 pm

Quote from:https://www.gov.uk/tax-live-abroad-sell-uk-home

In most cases you don’t pay any tax for any tax years in which you, your spouse or civil partner spent at least 90 days in your UK home.

For all the years you were UK resident, it will be exempt. Any gain that arises after you cease to be UK resident will be minimal, but make sure you notify HMRC of the sale.

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property
With a pinch of salt take what I say, but don't exceed your RDA

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

Re: Moving abroad - selling house

Postby maths » Sat Feb 10, 2018 7:44 pm

If your partner remains in the house in the UK, on a sale she will have no CGT charge on the capital gain on her share of the house.

If you leave the UK in May 2018 to work full-time overseas (commencing 1 June) it seems you will be resident for the tax year 2018-19 under the STT.

As a consequence, split year treatment will apply for that tax year; the overseas part starting on 1 June.

A sale of your interest on or after 1 June would be a non-resident sale but still subject to CGT on any gain; however, as the property has been your main/sole residence no CGT charge should arise if sold within 18 months of 1 June.

I wouldn't worry about the 90 day requirement unless you can't sell the house and you remain overseas beyond 5 April 2020 with no likelihood of a return to the UK.


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