PPR scenarios for Non-UK Residents?

by Readers Question

3 months ago

PPR scenarios for Non-UK Residents?

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PPR scenarios for Non-UK Residents?

Hello. I was wondering if anyone knew whether PPR Relief still applies against CGT even after you have become non-UK Tax Resident, where the PPR Relief relates to the period when you were still UK Tax resident? Can you use PPR Relief in conjunction with the rule that allows non-UK tax residents to only be subject to CGT in respect of property from 6 April 2015?

Say for example scenario (1): you bought a home in 2010 and lived in it from 2010 to 5 April 2015 and then rented it out from 6 April 2015 until you sold it in 5 April 2020. Say you became non-UK resident from 2018 onwards. Would you pay CGT on the capital increase for 5 years (2015-2020) or would you be able to claim PPR Relief of 18 months after you moved out (so, in effect, you only pay capital gains for 3.5 years)?

What if say scenario (2): you bought the house in 2010 and rented it out from Day 1, but then lived in it for 1 year from 6 April 2015, and then sold it in 5 April 2020 (having become non-UK tax resident in 2018). Would you pay CGT on the capital increase from 2015-2020 (i.e. 5 years), or could you also claim PPR Relief of 2.5 years (i.e. the year you lived in it from 6 April 2015 and then the 18 months afterwards)?, so that you only paid CGT on the remaining 2.5 years of Capital Gains?

Many thanks

Lional

Comments

Neil Patterson

3 months ago

The relevant HMRC guidence page is : Capital Gains Tax for non-residents: UK residential property >> https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

"Calculate what you need to pay

Work out what you need to pay if you’ve sold or disposed of a UK residential property since 6 April 2015.

You can use the non-resident Capital Gains Tax calculator >> https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/ if you’re a non-UK resident individual who’s sold or given away your entire share of a UK residential property. The calculator >> https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss#non-resident-capital-gains-tax-calculator will take you about 10 minutes to use."

The tax calculator does ask the PPR Questions as well so it seems to take PPR into account.

"Are you claiming Private Residence Relief?

You may be entitled to Private Residence Relief if you ever lived in the property as your main home.

Find out more about Private Residence Relief (opens in a new window)
Are you claiming Private Residence Relief?
Yes
No

To work out your Private Residence Relief, we need some information about when you lived in the property.
For how many days before 6 April 2015 did you live in this property as your main home?
For how many days between 6 April 2015 and 1 July 2016 did you live in this property as your main home?
Why these specific dates?
Get help with this page."

Mark Alexander

3 months ago

Reply to the comment left by Neil Patterson at 25/01/2018 - 09:14
Spot on Neil, I have nothing to add

Lional Chong

3 months ago

Wonderful - thank you Neil. That confirms what I had thought but I was asking because it just seemed too good to be true!!! 😀


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