GCT on UK Property, Non-UK Resident

[danderson]

Hello,

I am trying to calculate my capital gains, and hoping someone would be willing to check my numbers. Below are the calculations:

Purchase Date: 11/01/2008
Move Out Date: 30/05/2016
Rented between: 01/06/2016 01/06/2018
Sold Date: 11/08/2018

Sales Proceeds: £198,500.00
Less (Cost): £155,000.00
Gain:£43,500.00
Private residence relief £33,720.93
Lettings relief £9,779.07

Chargeable gain (Gain - PRR - LR): £0.00



I got to the chargeable gain of 0 understanding the following:

Private residents relief: (Months Living + 18 / months ownership) * Gain
Letting Relief: Lower of 3 figures.

1st: 40,000
2nd: private residents relief
3rd: (number of months rented, / months owned) * gain

Thank you for any help,
David

[AGoodman]

Your starting point is a little off.

If you are a non-resident, you are charged under the NRCGT regime, which means you calculate the gains with reference to the period from 5 April 2015.

The most important point is that you have to file an online return within 30 day of the disposal or (potentially) face severe penalties - see the relevant very long thread on the subject.

The default calculation is to treat the property as acquired on 5/4/15 at its then market value.
There are two alternative calculations - you can take the entire gain and apply a straight line basis (so you tax in proportion to the period since 2015 vs the overall ownership) or a retrospective basis where you look at the entire gain (that is more useful where the original price was greater than the 2015 value).

Full CGT would only be charged if you were a temporary non-resident and returned within 5 years, when the NRCGT paid would be taken into account.

PPR / lettings relief can still apply as you were in residence after 5/4/15 but I haven't had to look into the full details of how that works.

[danderson]

Thank you for your reply, much appreciated.

The property was valued at 160k in 2015 for remortgage purposes, though I lost that valuation paperwork during my move abroad. Given that, with a starting value of 160k as of April 2015, I still make that 0 NRCGT owned. Is that accurate?

[AGoodman]

It's complicated.

By default, you ignore the period before 2015/16 and you can't get regular PPR for 2016/17 if you were not UK tax resident for the year. On that basis you only get 12/40 * 38,500 = £11,500 PPR (plus possibly lettings relief).

After the annual exemption, you would have a small gain.

You would need to make the election for the retrospective basis of computation under para. 2(1)(b) Sch 4ZZB. That would mean you fall back onto your original computation (it uses the full gain and period of ownership for PPR).

Don't take this as read - it's not something I'm too familiar with.

nb. I see you appear to be late with the NRCGT return. Get it in asap as I fear penalties are coming your way, even with no liability.

[maths]

Based upon the figures no non-resident CGT charge should arise. This is due to both sole/main residence relief and lettings relief both reliefs being available to you.

[danderson]

Thanks again, apologies - using the US date format. The property only sold last week, so I have a couple of weeks to calculate this.

HMRC considered me tax resident in 2016/17 because they considered myself has having 'significant ties' and was able to claim various income tax reliefs in that year. 2017/18, and 2018/19 I am not resident. The form itself is quite overbearing, but I found this form, and all methods lead me to 0 GCT.

https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/calculation-election


Submitted now, I guess it's just a waiting game until I so my SA next April!

Thanks all,
David