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.
- Surprise visit from HMRC! 2,320 17
- Annual tax investigation cover fee? 117 3
- Stamp duty on multiple property transaction 247 15
- Capital Allowances and Building Improvements 290 9
- Cars Leased primarily for Taxi Hire 142 1
- VAT on digital streaming of my company's music? 145 2
- Can a sole-trader make pension contributions to avoid loss of personal allowance? 184 5
- Does this annoy anyone else ? 3,252 42
- Recharge for private use of a company car 130 2
- Bloomsbury Professional tax books 115 1
- IR35 - it it worth worrying about any more? 385 7
- Wear and tear allowance 451 10
- CIS deductions against the wrong UTR 199 6
- Residency test 199 4
- Alerting clients versus walking away from clients 246 3
- VAT Turnover 141 1
- HMRC - No Deadline to Respond? 147 1
- Recording fuel VAT adjustment in Sage 135 4
- Company purchase of shares 291 16
- Pension contributions and unused allowances 144 2
- Feedback on accounts production software for IFRS 690
- Auto enrolment excuses 665
- Add T&Cs to Sales Order in Sage 366
- Social investment tax relief 182
- Call Centre Data Costs 178
- Digita Hosted Software 177
- option to tax 161
- VAT on deposits 148
- Buying goods in US and selling them to company in US 136
- Travel costs and contractors 132