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Can Non Residents claim Private Residence Relief?

Sale of property where one owner (50%) is Non Resident and the other (50%) is a UK resident

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Hi

My brother (St. Lucia citizen / Singapore resident) & I (UK citizen/resident) are purchasing a property in London as tenants in common (50% each). I will live in the property at least for the next 3-5 years and then we may consider selling the property. 

On sale, if we do realise a profit, will I be exempt from CGT by virtue of claiming private residence relief? Also, what would be my brothers' liability in relation to NRCGT?

Thanks for your help!

Sid

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07th Jul 2019 10:28

Yes, based on current rules, your half share of the gain would be covered by main residence relief (I assume this property would be your only residence).

If your brother never occupies the property as his main residence, then he will be subject to CGT on his share of the gain after deduction of annual exemption (available to non-residents disposing of UK residential property).

It may be possible for him to claim some PPR relief for any tax years where he spends at least 90 days living in the UK property - see TCGA 1992 S222C.

Obviously, it is more tax efficient for you to own the property in your sole name or, if this is not possible, consider holding a greater ownership percentage.

Of course, with a new PM, the rules may have changed completely by the time you come to selling the property in a few years!

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