SAMHINAL1

Hello. We are planning to rent the UK house (mortgaged) for 12months and move to Australia (we have visa). We have lived in the UK house for last 5 years. When we sell the UK house, will we have to pay any capital gains tax? As it's our first property and we have lived in it, we just renting it out for 12months and then sell. Anyone with this personal experience? Thank you

louie

In the UK, maybe. The current rules are explained here - https://www.gov.uk/tax-sell-home/let-out-part-of-home, but they are expected to change on 6 April 2020 to reduce the final period exemption from 18 to 9 months and to withdraw lettings relief. In other words, if you exchange contracts to sell before 6 April 2020, no UK CGT, but if you exchange after then, yes there will be potentially be some CGT chargable. That said, you will still have your CGT annual exemption(s), £12,000 pp from 6 April 2019. So unless you make a pretty significant gain, you are unlikely to have much, if any, UK CGT to pay.

In Australia, it depends on whether the A$ proceeds exceeds the A$ value of the house when you become an Aussie tax resident.

BTW, the mortgage is irrelevant.

Alan Collett

The mortgage isn't irrelevant - see the forex provisions in Australia.

Best regards.

louie

Thanks Alan. I should have said irrelevant to the UK calcs. But I didn't know they were relevant to the Aussie calcs, so I have learned something new.