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Non resident landlord - sale of UK property

Not resident for 10 years - buys UK property whilst not resident - coming back to the UK then sells

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A client has been non UK resident for 10 years. Whilst abroad (and whilst non UK resident), he bought a UK residential property and has rented it out long-term.

He is now contemplating selling the property, and also is thinking about coming back to the UK permanently. He had a valuation done as at 6 April 2015 for CGT rebasing purposes. He has asked if he should sell before or after he resumes UK residence.

Has never lived there, nor were his intentions on purchase anything other than as a UK buy-to-let, so no PRR available. My view is that once he becomes UK resident he brings himself back into the UK CGT system entirely, such that his ENTIRE gain on the property will become taxable, without the benefit of re-basing as at 6 April 2015. However, I understand that for the new 'all UK property' rules wef 6 April 2019, companies who become UK resident on or after 6 April 2019 will retain the ability to calculate their gains or losses using rebasing to April 2019 market values; does this also apply to individuals who become UK resident?

Does the fact that he purchased the property whilst he was non UK resident mean that he will NOT come under the NRCGT rules (or do the NRCGT rules trump everything)? I suspect the answer is that the NRCGT rules trump everything.

Thanks.

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13th Aug 2019 09:32

I'd love to understand the logic. Having suspected that the NRCGT rules trump everything, you form the view that the ENTIRE gain will become taxable on his return to the UK.

Please read the rules. To give you a clue, s14B is even headed up "meaning of 'non-resident CGT disposal'".

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to Tax Dragon
13th Aug 2019 10:30

Tax Dragon wrote:

I'd love to understand the logic. Having suspected that the NRCGT rules trump everything, you form the view that the ENTIRE gain will become taxable on his return to the UK.

Please read the rules. To give you a clue, s14B is even headed up "meaning of 'non-resident CGT disposal'".

Thanks for your reply. Apologies that my question wasn't properly structured.

Upon his return to the UK, and the resumption of UK residence, he will no longer be subject to the NRCGT rules (because he is not Non Resident). I was asking if he would still be able to re-base in these circumstances, similar to how companies are able to do so wef 6 April 2019 if they become UK resident.

I was also asking if it makes any difference that he purchased the property during a period of non-residence and that if he sold it whilst still non resident will this mean it is entirely exempt (as would other non-property assets generally), or would the NRCGT rules override this and bring it into charge? In other words, do the NRCGT rules apply to ALL UK properties, regardless when they were acquired?

Thanks anyway for your time and for the link to S14B which I shall look at.

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13th Aug 2019 09:51

Best if you ignore the comment above (and all his other comments for that matter).

The obvious ideal solution is for him to sell whilst non-UK resident for a complete tax year, as that way he should get April 2015 rebasing (assuming it was bought before then) by filing a NRCGT return.

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to Justin Bryant
13th Aug 2019 09:53

You're right, Justin. You're always right.

OPs should not think for themselves, they should not make any effort to understand the rules. They should just (advise their clients to) do whatever you say. After all, you are, as we have established, always right. (And if the client asks questions, the OP can simply reply with "Justin said so".)

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to Justin Bryant
13th Aug 2019 10:36

Thanks.

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to mail.taxperfect.co.uk
13th Aug 2019 11:05

Do be aware that there are other countries that charge tax on worldwide gains. If your client is living in one of them, blindly doing what Justin says could leave him out of pocket.

But Justin's right about one thing - s14B doesn't apply. FA2019 has killed it off. My apologies.

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