gryphea

Oh- I must be muddled the lady on the phone at inland revenue said for us one of two things would occur:
1. If we came back to the UK after 5 years and had been away to work we would not be charged any capital gain.
2. If we sold after 5 years and were still living in canada and not resident in UK for any of that intervening time we would not be due any UK capital gains

I did query this with her but she said that was the case. She also gave me some date since when it was like that and said she couldn't forward predict what govenments would do but as it had been in while and gordon brown hadn't changed it she thought it would continue and that tories would be unlikely to make the situation worse.

Which means she had it wrong, which is very possible as she was a phone advisor not a practising tax accountant BUT she was from their specialist overseas division and I feel a bit misled.

Gryph

JonboyE

This is from the UK DirectGov website

When you no longer live in the property

Even if you no longer live in your property, you can still qualify for the full amount of private residence relief, provided that:

* the property has been your main home from the time that you bought it
* it has otherwise fully qualified for private residence relief (for example, you have not used part of the property exclusively for business purposes)
* you sell it within three years of moving out or it no longer being your main home

Working abroad

If you have been working abroad you will normally be treated as though you have lived in the UK property, and so qualify for private residence relief, provided that both of the following apply to you:

* you live in the property both before and after your absence
* you have no other home which qualifies for private residence relief

This relief also applies when it is your husband, wife or civil partner who was working abroad.

You will still get private residence relief for your time abroad, even if you do not return to live in the UK house, provided that the only reason you do not come back to live in your former home is that the employer requires you (or your husband, wife or civil partner) to work elsewhere.

gryphea

So I am still confused. I read this as if you are being employed in canada and your employer requires you to be there and you sell your home remotely , then you qulaify for relief - is that your interpretation?

Gryph

JonboyE

I make no claims to be an expert on UK tax but my interpretation of this is that:

a) If you decide to up sticks and move to live abroad, your ex-home in the UK can be sold without any capital gains tax within three years of your move.

b) If your (or your OH's) employer sends you abroad to work for them your UK ex-home can be sold at any time free of capital gains tax provided you are still abroad because your employer requires it, and you do not have another principal private residence elsewhere.

Situation a) is relevant if you emigrate. Situation b) is relevant if you are posted abroad by your current UK employer. I guess a) also applies if you live in Canada on a work permit and buy a house in Canada. Tax law in both countries will only allow a family to have one principal private residence at once.

annabella

What "high interest account" would you recommend? Could you give me a source to research this please? I don't know if offshore is the way to go and what would be the advantage against a mainland UK investment account.

jasslily

I'm more confused then ever before
Can anyone simplify:c onfused:

gryphea

Thanks Jonboye

I am going to phone them up again and clarify the situation if you go abroad to work but with a difffereent employer

Gryph

dingbat

This is precisely the reason I sold when I came out here way back when. There are some very odd interpretations of CGT floating around on this thread...

gryphea

I think it honestly depends why you move out to canada to begin with, and the circumstances on a WP could be very different from emigrating............

I am going to reclarify with inland revenue as they were pretty helpful before

bandit

Well

What a question I asked....!!! Seems very confusing and one I'll need to spend alot of time considering.

You all are very helpful - thank you!

Bandit!

Paul Wildy

Somewhere like this site lists all the current rates of savings accounts http://www.moneyfacts.co.uk/savings/...-accounts.aspx but if you do a search you will probably find other "best deal" lists too.

With regard to the question about offshore or not, I'm afraind I don't know the answer. You would need taxation advice. The advantage of investing offshore is obviously that you are not paying tax at source but I don't know if you are allowed to do it. If you are non resident in the UK during the period but are resident in Canada then I would think you would have to declare it and pay tax on interest here. I suppose in that case you would probably want to make sure you are not paying tax at source in the UK too but having savings in a regular onshore account. Maybe others will know the answer to this one?

Almost Canadian

If you do not sell your property whilst abroad, it is still classed as your primary residence and the exemption from CGT applies. If you work abroad and sell it, the exemption only applies if your employer required you to go abroad, ie, armed forces, working for company that required you to relocate. If the argument that "my employer requires me to be in another country" held any weight at all, everyone that leaves the country could use this as I suspect there are very few employers that would allow their employers to live in England whilst "working" for them in Canada.

The easiest thing to do in these circumstances (when trying to interpret law) is to think about what the law is trying to achieve: in this instance, it is trying to "assist" those who, through no fault of their own, find themselves outside of England and Wales for a significant period of time. Trying to argue that, being on a work permit in another country, purely by your own decision, is similar to being required to do so by an employer is a little farcical.

You need to read the law and the cases that interpret it, not listen to a civil servant that was probably working on the deli counter at Tesco 3 weeks before giving you advice that s/he doesn't understand themselves

expatadvisor

All very interesting this, I will state the facts just from the UK perspective for an expat going abroad and becoming non resident in the UK for tax purposes, and initially renting his main residence out when he goes abroad.

Say you leave the UK are non resident for tax purposes in respect of your foreign earned any income arising at source in the uk is still subject to UK income tax. However, any potential tax liability on rental income received in the UK can be offset against mortgage interest payments, insurances, agents fees, accountancy fees etc and it is even possible to utilise a persons personal allowances in the UK even when they are non resident. If you sell this property within the first three years of going abroad then as it was your main residence when you lived in the UK then there is no capital gains liability on any gains made. Thereafter so long as non residency contrinues then an expat becomes exempt from UK capital gains tax thus there is still no capital gains tax liability on the gains made.

However, a sting in the tale is that should you sell your house and then return to the UK permanently in the same tax year then a portion of the gains made may be subject to capital gains tax. As with any IR legislation we deal with various shades of grey, nothing appears to be black and white hence the confusion I suspect here.

Please note you do need to check out legislation in your respective coutries of residence and income may need to be declared where you are. As a warning note many countries now have double taxation agreements in force and also transfer tax information between each other as well. I hope this helps a bit.

gryphea

Thanks expatadvisor- this has muddied the waters somewhat as this is kind of what I thought it was- or so IR advised me- but lots of people disagree and so I think for our sanity I will get further advice!!

Gryph

annabella

Thanks a lot for the address and your comments. It always beats me why the interest on money raised in UK and invested either in UK or offshore has to be declared in Canada. If it stays where it is integrally, i.e. no bank transfer to Canada, nor "used" in Canada in the sense of it being extracted from an ATM in cash to use here, why should it be declared here? I can understand better it having to be declared in UK in that case.