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.
- First VAT Visit for client 193 4
- Dividend in specie 219 7
- VAT on imports and the Flat Rate Scheme for VAT 147 8
- Partially exempt? 227 8
- Lorry Drivers 125 2
- Redundancy payment added to p45 34 1
- Partnership registered in error. No activities with view to profit. 72 1
- Mexican student in UK 110 2
- PI insurance for Auto Enrolment 186 3
- Accounting Practice acting as an employment agency 285 12
- payroll software 88 1
- No Tax Returns submitted for last 16 years 1,040 25
- Complicated Company car purchase 84 1
- Pricing 325 10
- Late VAT registration penalty 239 5
- VAT 112 2
- QuickBooks, Xero, FreeAgent and ClearBooks 846 18
- Twenty signs your practice is bad at tax 641 7
- Rental Income Tax Planning 209 3
- Vat 105 2
- Skandia using wrong address 476
- Does anyone use PS Financials accounting software out there? 274
- FHL, period of grace and Entrepreneur's relief 268
- Employee rewards 256
- Legislation access for part-time sole practitioner? 217
- Rental Property W&T And Equipment 215
- EPS Analysis - Change to EURO 210
- Gift of reversion and lease into trust by two different people - later PPR 201
- Etax Australian 169
- Annual Management Charge Rebates and Self Assessment Tax Return 157