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CGT on selling property whilst living overseas

Tstephen1979
by Tstephen1979 13 January 2013  |  Comments 3 comments  |  Love Love  0 loves

I own a property in the UK which I purchased 10 years ago. For the past 6 years, I have been living in Australia and renting the property out for about £9k per year I am considering selling the property but am keen to understand what my tax bill would be and if I would be better to hold onto the property.

The property is currently solely in my name but I had considered putting it into joint name with my husband however given we do not live in the uk, I was under the impression that we would not be eligible for the CGT allowance, only the standard £8k income tax allowance each?

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Comments (3)

  • MikeGG1
    Love rating 909
    MikeGG1 posted

    There is no CGT allowance for overseas residents, but there would still be a benefit of the transfer if the chargeable gain took your income into the higher rate band.

    The rate is 18% on any remaining basic rate band and 28% of anything above that.

    However, you would only be liable for about 30% of the gain. You can claim Private Residence Relief for the 4 years that you lived in the property and also the last 3 years. The % would be worked out using months.

    It should not be too expensive to transfer the property if you use the same solicitor as for the sale.

    Please bear in mind that you can include the cost of buying the property and of any improvements (but not anything that you have claimed against the rent) in the starting price and reduce the selling price by the costs of selling (e.g. estate agents, solicitors) before applying the %.

    Mike

    Posted on 13 January 2013 | Love Love  0 loves Report
  • bazzamail
    Love rating 0
    bazzamail posted

    So long as you remain not resident or ordinarily resident in the UK for at least 5 tax years you will not be liable to capital gains tax on the sale of the property whilst you are non-UK resident.

    Posted on 17 January 2013 | Love Love  0 loves Report
  • RichardSowler
    Love rating 18
    RichardSowler posted

    The question is a little light on detail, but bazzamail is on target. Are you sure that you have been non-UK resident for the six years? The old rules are somewhat uncertain and new ones (from 6/4/13) which, while not being simple, are rather clearer. Also, have you looked at the Australian tax position? If the facts were the other way round and you had an Australian property and UK residence for the same periods you would be liable to UK CGT.

    Posted on 19 January 2013 | Love Love  0 loves Report

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