Non-Resident CGT on UK Property

What happens to CGT property basing when a non-res becomes res?

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A partner has been non-UK resident for 20 years, and has owned a UK property since 1996.

If he sells this now, the CGT will be rebased on the gain since April 2015. But what happens if he moves back to the UK, becomes UK tax resident and then sells it in a couple of years time? Can the benefit of rebase value at 2015 be 'crystallised' in any way or will he have to pay CGT on the entire gain since 1996, effectively wiping clean his entire non-resident benefit? What is the definition of 'non-resident' with respect to CGT - I have heard it said that if the non-residency period were greater than 7 years, then the non-res benefit can be used for up to 3 years upon return.

All wisdon gratefully received, thank you.

 

Replies (3)

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By Wanderer
03rd Feb 2021 20:02

John Forbes wrote:

Can the benefit of rebase value at 2015 be 'crystallised' in any way

Yes, they can sell it before they return.
John Forbes wrote:
I have heard ......... 

Ask the person you were listening to for their legislative source then you can check into it.
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Caroline
By accountantccole
05th Feb 2021 12:33

I have been looking at this for a client, who is returning to the UK having made a non resident gain a few years ago.
We concluded (with helplines) that the tax is due, based on normal calculations (no rebasing) and is declared in the tax year of return, when it crystalises, Knock off previously declared tax.
Not got as far as what boxes numbers go in.
Helpline didn't mention any 7 year points but that wouldn't be relevant in my scenario. It doesn't sound right though.

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Replying to accountantccole:
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By John Forbes
05th Feb 2021 18:10

I've looked further into this - I imagine the 7 year issue was concerning temporary non-residence for CGT; an individual will be considered 'temporarily non-resident' (and therefore liable to normal UK CGT on property) if he has been non-resident for <5 years before returning to UK whilst also being UK resident for at least 4 of the 7 years prior to departing.

So, no, you're right, it's not right at all!

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