Capital Gains Tax question

[idrabble]

Hi Everyone.

 

We moved to Australia 4.5 years ago and as we could not sell our house (bought in 1998) we rented the property.

We had the house valued before we emigrated.

We bought a house here 2.5 years ago and finally sold the UK house 1 year ago, for less than it was valued at when we lived there, but more than we initially paid for it.

 

Will we be liable for CGT?

 

Thanks in advance, Ian.

[akiralx]

In my view, no. Your circumstances are v similar to mine.

[Rupert]

In my view, no. Your circumstances are v similar to mine.

 

How do you make that out then? Owning two houses generally means there is the potential for CGT as they cannot both be exempt as primary residences.

 

Having said that, people sometimes panic about CGT, after allowances and pro rating the gain and so on, one would normally have to make a pretty substantial profit to have anything to pay. That does not mean it is not liable though..

[Notts]

Will we be liable for CGT?

 

Thanks in advance, Ian.

 

In the UK or Australia?

[akiralx]

How do you make that out then? Owning two houses generally means there is the potential for CGT as they cannot both be exempt as primary residences.

 

Well, I understand from the OP that there was no capital gain since the UK house has reduced in value since it ceased being the principal private residence.

[idrabble]

In the UK or Australia?

 

 

In Australia.

[idrabble]

Well, I understand from the OP that there was no capital gain since the UK house has reduced in value since it ceased being the principal private residence.

 

I did think that as the property had decreased in value that no CGT would be liable but you never know with tax liabilities, they are always so complicated.

[Alan Collett]

You may have a capital loss given the fall in the GBP-AUD exchange rate over the period from the date you moved to Australia and the date you sold the property, even allowing for the fact that some of the period of ownership is covered by the 6 year exemption.

 

Consider asking a tax accountant to compute the position for you, as even though capital losses cannot be claimed against income such a loss may be useful in future years if you buy investments personally.

 

Best regards.

[Notts]

Well, I understand from the OP that there was no capital gain since the UK house has reduced in value since it ceased being the principal private residence.

 

For UK tax that's not how it works - the PPR relief reduces the taxable amount of the total gain from purchase/March 1982 (whichever is later).

[Alan Collett]

For UK tax that's not how it works - the PPR relief reduces the taxable amount of the total gain from purchase/March 1982 (whichever is later).

 

UK capital gains tax shouldn't be an issue, as the OP is no longer resident in the UK.

 

Best regards.