Q If you sell your main home which you have let while yourself renting another place or places to live are you exempt from [capital gains tax] CGT? All the pieces I’ve read, including the HMRC websites assume you must otherwise own or share a partner’s owned property.
Surely no CGT is due on the sole home property if you are yourself renting?
Secondly, I’ve lived abroad for 20 years and will return to the UK this tax year to sell my sole UK home. I lived in my house for four years before leaving and renting it out. I don’t own property elsewhere.
While I sell my house (which is currently rented out) I shall rent a flat for myself distant from the house. (I’m not living in or sharing a partner or friend’s property.) I believe that exempts me from CGT. Is that correct?
I believe I’m allowed up to nine months in the UK while selling (the UK property). Is that so?
Am I permitted to live in my house while in the process of selling without prejudicing my tax (exempt) position?
Thank you for your attention. I hope this may be of interest to your readers concerned about sneaky stealth taxes everywhere.
GM
A I hardly think that CGT – which has been with us since 1965 – can be described as a “sneaky stealth tax”. But I suppose that you might feel justified in describing as “sneaky” the relatively recent changes to CGT on UK property owned by non-residents.
For example, you may not have realised that if you bought your property before 6 April 2015 – which you clearly did – when you come to sell it, you will only be liable to tax on the part of the gain you make which has accrued since 6 April 2015 rather than from when you bought the property, which is what usually happens.
You have a choice of how the tax is calculated, which are quite technical so you should seriously consider instructing an expert tax adviser such as uklandlordtax.uk or expertsforexpats.com.
Such experts will also be able to confirm that living in a rented property does not exempt you from CGT and clarify that since 6 April 2019 non-resident owners have been liable to tax on the whole gain made on the disposal of UK land and property, wherever they are living. They will also be able to work out how much less CGT you are charged because the house was your home for four years.
You might find it helpful to have a look at HMRC’s Helpsheet HS307: Non-Resident Capital Gains for land and property in the UK.
