CGT question

Old Jul 31st 2020, 10:20 am
  #1  
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Default CGT question

Hi:
Quick question and apologies if it has been asked before.
Is there a time limit on CGT exemption on your former main residence after you have returned to the UK.
I have lived abroad for 20 years and will be returning home soon but for various reasons will not be able to sell my home for 2-3 years.
And is there a useful free site other than HMRC that might answer this and similar questions from someone contemplating a return to the UK.
Thanks in advance
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Old Aug 1st 2020, 3:59 pm
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Default Re: CGT question

We will be in a similar position when we sell up in the US and return to our UK house that has been rented out for 10 years. As dual citizens we need to file in both US and UK. It is our understanding the if we live in the UK house for 2 - 3 years before we sell, we will not be liable to any CGT in USA (on the basis it will be our sole primary residence that we will have lived in for 3 out the previous 5 years with a gain of < $500k). However, we will still be liable to some apportioned gain (for the rental period) for CGT in UK, this liability will be further offset by the annual CGT allowance but will not be eliminated. Would be interested to hear other views on if our understanding is correct.
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Old Aug 2nd 2020, 5:44 pm
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Default Re: CGT question

After 175 views and no reply to my original post I re-read it and I can see that I might not have been clear enough.
It's my main residence where I lived abroad not one I had back in the UK.
I have tried searching through many threads on here without finding the answer.
The HMRC website doesn't give clarity either.
Or perhaps it's simply a grey area without any definitive answer.
Any input would be gratefully received.
Thanks.

Last edited by Baggist; Aug 2nd 2020 at 5:48 pm. Reason: Clarity
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Old Yesterday, 11:22 am
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Default Re: CGT question

Hello Baggist,

The rules surrounding capital gains tax changed with effect from April 2020 as follows:

- Disposals must be reported to HMRC and capital gains tax paid within 30 days of completing a sale

- Final relief is reduced from 18 months to nine months

- Lettings relief will only apply for any period when the landlord lived together with their tenants

Also, you will only get partial private residence relief because the property will not be your main residence at the point of disposal.

However, if you let some or all of your property as residential accommodation then you will also be entitled to lettings relief if you meet the condition outlined above.
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Old Yesterday, 12:09 pm
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Default Re: CGT question

Originally Posted by Baggist View Post
After 175 views and no reply to my original post I re-read it and I can see that I might not have been clear enough.
It's my main residence where I lived abroad not one I had back in the UK.
I have tried searching through many threads on here without finding the answer.
The HMRC website doesn't give clarity either.
Or perhaps it's simply a grey area without any definitive answer.
Any input would be gratefully received.
Thanks.
As I see it the UK tax 'concept' is that IF you are tax resident in the UK you have to pay income tax and capital gains tax on your world income/gains. Therefore there is no differentiation between UK and overseas property in terms of the basis for calculation of CGT on your main residence. That's why you'll not see HMRC specifically mention overseas residential property.

However, that might be different if the country that you are returning from has a double taxation treaty with the UK or that country taxes gains on residential property whether or not it is your main residence.

So TopNik's comments apply.
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Old Yesterday, 1:00 pm
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Default Re: CGT question

I haven't kept up with the details of all the recent changes in CGT, but at least until recently, and perhaps still, CGT relief was available on yiour home in the UK if you were overseas "for reasons of work", which included if it was your choice, not just if you were sent overseas by your employer.

Given the amounts involved, and the changes in recent years, I would strongly recommend consulting a tax accountant. Any small accountant offering services in the UK should have the knowledge and experience to advise you.
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