As more UK citizens relocate overseas, we have experienced a corresponding increase in enquiries concerning the capital gains tax implications of selling UK property.
Historically, individuals who sold assets while not resident in the UK were generally not subject to capital gains tax, unless they were caught by the temporary non-residence rules. However, in April 2015 the non-resident capital gains tax regime was introduced for residential property gains, in 2019 this was extended to non-residential property and indirect sales e.g. property rich company share sales.
There are several methods of calculating a property gain, one of which involves the use of the April 2015/2019 valuation and while the valuation can be checked with HMRC following the sale, a response is unlikely prior to the 60-day report and pay filing deadline.
Should you retain a home in the UK whilst resident overseas, private residence relief may still be available in certain circumstances. For example, relief may apply if your spouse or civil partner has an interest in the property and remains UK resident or the day count test is met.
Additional protections may also be available, including the job-related accommodation exemption and deemed periods of occupation provided the property is re-occupied following the absence. In addition, the final nine-month cover still applies where the property has been a person’s main residence at some point.
Where multiple homes are occupied concurrently, a private residence relief nomination may be possible, such a nomination can be made alongside the non-resident property return (different time limits apply to UK residents).
Finally, it is important to consider the requirements of the Non-Resident Landlord Scheme when departing from the UK, a frequently overlooked UK tax regime by those intending to rent their properties during their absence.
Given the complexity of the rules and the strict reporting deadlines that apply to non-UK resident property gains, please contact us to discuss your position and obtain appropriate tax advice.