imagegrill
10-08-2008, 17:05 PM
Hi, new to this forum. I found when trying to research my CGT liability.
We brought the house (joint owned with my wife) in May 2003. I then took an ex-pat position with my employer in Feb 2007 and have rented out my house since then. Until the renting, the house was our PPR. I am due to finish my ex-pat position in May 2010 and will be returning to the UK.
I know any CGT is liable at 18% after each individual limit is taken into acount (2 * £9200). However is the CGT on the whole profit or just the profit as a percentage of the years we rented is out. That is 3.25 years form 7 if we chose to sell when we came back. What happens if we move back into the property, will we still have to pay CGT on the rental years when we sell? :confused:
Now I have a few options and I am trying to work out the best tax wise but I need some advise as to where my tax liability is. So I have listed my option below:
1) Sell at the end of the current rental agreement with my tenants (Jan 2009). This means the house would have been owned by us for 5.66 years and rented for 2. I don't think there is CGT is pay here.
2) Rent for a further year and sell at the end of that rental agreement. House would be owned for 6.66 years and rented for 3. Again I don't think that CGT is payable here, but there pay be an issue if contracts are exchanges after the 3 years rentel period. Comments anyone?
3) Rent until we are due back in the UK (May 2010) and move back into the house. What are the CGT implications here?
The selling part all becomes more complicated when trying to work out the housing market (poor I know at the moment, but things change). At the moment, with property prices as they are we would stand to profit by 70K, assuming we could find a buyer.
Out objective was always to sell the house on our return and buy a larger house.
I would appreciate any help with the rules to the 3 options above. Knowing the rules will obviously help me to make most informed decision for the future!
Thanks!
Paul
We brought the house (joint owned with my wife) in May 2003. I then took an ex-pat position with my employer in Feb 2007 and have rented out my house since then. Until the renting, the house was our PPR. I am due to finish my ex-pat position in May 2010 and will be returning to the UK.
I know any CGT is liable at 18% after each individual limit is taken into acount (2 * £9200). However is the CGT on the whole profit or just the profit as a percentage of the years we rented is out. That is 3.25 years form 7 if we chose to sell when we came back. What happens if we move back into the property, will we still have to pay CGT on the rental years when we sell? :confused:
Now I have a few options and I am trying to work out the best tax wise but I need some advise as to where my tax liability is. So I have listed my option below:
1) Sell at the end of the current rental agreement with my tenants (Jan 2009). This means the house would have been owned by us for 5.66 years and rented for 2. I don't think there is CGT is pay here.
2) Rent for a further year and sell at the end of that rental agreement. House would be owned for 6.66 years and rented for 3. Again I don't think that CGT is payable here, but there pay be an issue if contracts are exchanges after the 3 years rentel period. Comments anyone?
3) Rent until we are due back in the UK (May 2010) and move back into the house. What are the CGT implications here?
The selling part all becomes more complicated when trying to work out the housing market (poor I know at the moment, but things change). At the moment, with property prices as they are we would stand to profit by 70K, assuming we could find a buyer.
Out objective was always to sell the house on our return and buy a larger house.
I would appreciate any help with the rules to the 3 options above. Knowing the rules will obviously help me to make most informed decision for the future!
Thanks!
Paul