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CGT on UK property whilst ex-pat in Dubai

Eck
Posts: 24
Joined: Fri Oct 11, 2013 12:14 pm

CGT on UK property whilst ex-pat in Dubai

Postby Eck » Tue Nov 14, 2017 9:50 am

My husband has been offered a job in Dubai after a period of unemployment in the UK oil industry. We are delighted (and relieved!) but worried about what to do with our house. The market here is in recession (again, thanks to oil downturn) and the rental market non-existent.

We jointly own the property which has been our main home for 10 years. It is the only asset we own and it still has quite a high mortgage outstanding.

We want to sell it but it will likely take several months. My husband is leaving soon and I will follow with the kids by the summer. So it's possible either he, or both of us, will be ex-pats by the time the property sells.

I would like to understand how CGT will affect us. As you can imagine, money has been very tight recently and we have debts arising from a failed business.

Am I right in understanding that the CGT liability will relate only to what gains the property value has made since we become non resident for tax purposes? So for example, if we have it valued now at £300,000 whilst both still UK tax payers, then it sells in the next few months for £300,000 then there is no CGT to pay? But if it sells for £310,000, then we are owe CGT at 18% on the profit gained since we left the UK of £10,000?

Also, what happens if my husband is non resident but I'm still here? Does the CGT only apply to his half of the profit?

With many thanks for your assistance. We are going to engage a tax accountant to sort out all our details ref tax returns etc before we go, but for now we are still not technically earning anything so your help is invaluable.

maths
Posts: 6995
Joined: Wed Aug 06, 2008 3:25 pm

Re: CGT on UK property whilst ex-pat in Dubai

Postby maths » Tue Nov 14, 2017 9:55 pm

A non-resident selling a UK residence at a gain is subject to capital gains tax on the gain. The gain is the difference between sales price and value of property as at 6 April 2015 not from the date when he/she became non-resident.

However, if the property is the only or main residence any gain should be CGT exempt. In this case it wouldn't matter if one of you were resident at the date of sale and the other non-resident.

etf
Posts: 395
Joined: Mon Nov 02, 2009 5:25 pm

Re: CGT on UK property whilst ex-pat in Dubai

Postby etf » Wed Nov 15, 2017 9:51 am

If either of you are non-UK resident at the time of sale, you only have 30 days from the conveyance date to prepare and electronically file a NRCGT return. This applies even if the whole gain is covered by principal private residence (PPR) relief.

KR

etf

SteLacca
Posts: 278
Joined: Fri Aug 07, 2015 2:17 pm

Re: CGT on UK property whilst ex-pat in Dubai

Postby SteLacca » Thu Nov 16, 2017 11:07 am

If the property is sold within 18 months of leaving, then the whole gain will be covered by private residence relief and no CGT will be paid. If it's outside the 18 month period, then CGT will be payable on the pro-rated gain (e.g. if sold 2 years after leaving, and it was home for 10 years, then the gain for CGT will be Gx6/144 where G is the total gain). You will each still qualify for the CGT exemption of £11,300 on your share.

As has been mentioned, if you are non-resident at the time of disposal, then a NRCGT Return must be completed and filed within 30 days.


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