britishbull

Luckily, I managed to exchange and complete on my house sale in the UK in April. Unluckily, this went down after the end of the tax year (exchanged and completed April 11th 2008). As I have been non-resident for eight years and the property was rented out I will avoid CGT on the sale... but do I have to remain out of the UK until the end of this tax year or can I come back to the UK now and still get the CGT exemption?

If I have to stay out of the UK until the end of this tax year, can I buy another property whilst non-resident without it affecting my status. If I have to, I will rent it out to convince the IR that I am not living in it on the quiet (but would that then affect my the CGT if I sold it later when resident?). Some good bargains in the current market if you have cash to do a quick deal.

louie

There's several other things that affect the answers to this, but have a look at this link to HMRC's capital gains tax manual - http://www.hmrc.gov.uk/manuals/cg1manual/CG26170.htm

sans

I wouldn't bother buying now unless you have too. House prices are set to keep going down for the next 12 mths at least. If you buy now just to sell you could end up out of pocket.

britishbull

Hi, Thanks for the flow chart link (doesn't work in Firefox if anyone else wants to try it), which confirms that I am okay regardless of when I return because of the five tax years out of the UK.

I am keen on exiting paradise (thailand) as soon as possible for personal reasons... I have read that you can exit the country you are resident in and go on "holiday" in a third country, say Spain, until the next tax year and still be treated as non-resident for that tax year in the UK if you return on April 7th (obviously you would not want to spend more than six months in a tax year in the third country). I would only be planning to spend a week in the UK this tax year so am okay there.

I would want to do this as I have some long term offshore interest from bank due in April 09 which I would then avoid tax on as well, and I would not want to rent in the UK, prefer somewhere cheaper like Spain. Anyone done this?

As I said, there are some real bargains in UK housing at the moment, and whilst general prices may drift downwards, I feel the next six months is a good time to buy - but not if it is going to mess up my non-resident status!

Bijilo123

You seem to satisfy the 1998 rule which is that you have been not ordinarily resident and not resident for a period of 5 years after 1998 and now.

You will be taxed on CGT for any gains made in the year that you return. You should therefore not be in the UK for that tax year when you make the gain.

britishbull

According to the IR site split tax year would apply if I came back before the end of this tax year and CG would only apply to gains realised after I came back and not to the house sale which has already taken place. I am fine on the 90 day rule and five year non-resident rule.

Unless I am missing some point (the government's love of sound bites often hides completely illogical application of taxes), but for various reasons I am inclined to stay non-resident until the next tax year anyway, albeit keeping open the possibility of buying a house before I return.

BTW, for those wondering why I sold a house and then want to buy one, it is because it was a rental property when I was resident in the UK before 2000 and if I didn't sell it before becoming resident I would have had to pay some CG tax later if I decided to change houses.

Yes, I should stomp up a hundred quid an hour for a UK accountant who specializes in this area! But kinda had to arrange as I am in Thailand not the UK.

Bijilo123

You don't need an expensive acountant, the rules are clear enough and where the revenue wants to set a precedent then they will - expensive advisor or not!

I agree you should keep clear until after April 6 - it is possible to make mistakes in the last year or worse to send the wrong signal to the HMRC.