Allowable absence, letting and CGT
Someone has just phoned to ask me capital gains tax advice on a property that used to be her PPR until she and her husband (although they weren't married at the time) moved to Australia. They have now returned to the UK and are living in the property. She phoned HMRC twice and was told both times that she would have no CGT to pay when she sells the house as she was working in Australia and it was thus an allowable absence.
My view is that allowable absence only counts if you leave the UK in order to work overseas by prior arrangement, not if you emigrate and then find a new job out there. But maybe I'm wrong - does anyone else know for sure?
As far as CGT goes, I don't think it makes any difference in her case, because even if it was an allowable absence, the fact that she let the property out the whole time she was away would make it taxable for this period anyway, even if it was still her PPR. After all, if she had let out part of the house whilst still living there, that would create a CGT liability on the percentage let out, unless (I believe) it was covered by the rent-a-room exemption (although I may be wrong about this).
It worries me that HMRC give out that sort of advice without knowing the full facts, which then flies in the face of what I told her.
Useful comments on this would be appreciated.
- Should he transfer the Van into the company ? 48 1
- Any Scottish members out there? 10,186 364
- What is the role of an accountant? 384 13
- A question for the payroll-only bureau's out there 248 1
- P11D Query 140 4
- 100% Xero practice 2,244 40
- Out of Date Returns, CIS and Determination 61 3
- Shutting down a company with creditors 1,320 25
- Company Accounts 434 8
- QuickBooks - Separating expenses from purchases 83 2
- Lexis Nexis 3 Month Cancellation Notice 283 7
- EIS/SEIS capital gains exemption 189 4
- VAT on introducer fees 119 2
- Investor wants shares. How does that work? 76 2
- Pay-slip date & Pay-ment Date 199 12
- Statutory Maternity Pay (SMP) 319 18
- Scottish but not UK 278 7
- Pension Contributions Relief 270 9
- VAT Fuel Scale Charge for Fuel on Private/Personal Car 284 5
- CIS 353 11
- Raiders of the Lost Tax File 1,220
- Chartered Accountant in County Down N.Ireland 428
- National Insurance 327
- IPP (International Pension Plan) income 320
- Non Resident 252
- Unnecessary S9A Enquiries 250
- Cass 5 FCA Client Money Software recomendation 240
- Franchise income and costs 219
- Tax on interest received from insurance company 154
- Hands on experience of Digita 152