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Confused-non resident CGT on residential property

Client is going to sell and asked for an indication of gain

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My client, who moved abroad to Canada to work in 2019, is about to sell their former UK home that has been let out for a couple of years as well and i must confess this is above my pay grade as i always say no to any clients who have non resident issues.

Simply (if it is as i cannot see a definitive answer) i am unsure if the fact that they lived in the property until 2019 as main residence can be used in the calculation of the gain as all i read about the 6th April 2015 value talks about the gain accrued since that date but nowhere can i see that they can claim it as PPR until it was let thus reducing the gain.

The facts (rounded for ease) are as follows;

  • Purchased 2010 for £325k
  • 6th April 2015 value £400k (next door (identical terrace house) was marketed in Jan15 at £415k and completed sale in Jun15 for £400k so we are confident of value)
  • About to be sold now for £475k
  • Occupied as main residence 2010 to 2019 when went to Canada
  • Let out late 2019 to early 2022 (3 years)
  • Empty so far in 2022

In the 7 years since April 2015 the gain is £75k but the property was his PPR until 2019 so 4 of the 7 years - is that amount of the gain allowed to still be claimed as PPR - apologies i am new to this and cannot find a definitive answer 

I just need to give him an estimate (and also advise he will have to declare it ) of the potential CGT and the best route - eg do we look over the whole 12 years of ownership if we can still claim PPR or use the 2015 valuation method? 

Thankyou for any help



Replies (4)

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By accountantccole
23rd May 2022 12:04

PPR may be allowed, there are extra day count tests to factor in - have messaged you a link

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Replying to accountantccole:
Part on Dudes
By Partyondudes
23rd May 2022 12:21

Thankyou very much

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By ireallyshouldknowthisbut
23rd May 2022 12:17

You can use PPR in this situation if it helps from April 2015 to 2019 and pick up the final 9 months.

Usually you do all the possible comps, ie normal method, April 2015 value etc and see which is best.

Just think of it as an (optional) rebasing.

Quite frankly they should get rid of the rebasing, just seems to be giving non-residents an unfair tax boost, albeit honest ones. Almost nothing HMRC can do if its not paid. If HMRC were serious about tax collection they would take a withholding tax on the sale, and then get the vendors to claim it back via the 30/60 day system. Its standard in many jurisdictions. Soft touch UK™

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Replying to ireallyshouldknowthisbut:
Part on Dudes
By Partyondudes
23rd May 2022 12:21

Thanks very much for answering

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