To be resident or not to be resident

[Mikan]

Good Afternoon everyone,

I have read quite a number of threads in your forum and i have got a few answers to some of my questions BUT I have still got a few questions that I would really appreciate someone giving me some advice on. let me, though, explain my current situation.

I have got two properties (A and B) both on my name and both with mortgages. I am renting out property A and living, as my main residence, in property B.
I am, currently, living with my partner and our two daughters, in property B. I am currently an UK ordinarily resident, (Lived here for over 10 years), but I am not British. I have been offered a very good job abroad, in Europe mainland. If i accept the job, it may be a long time before we even think to return to the UK permanently, and I am talking about years here, assuming that everything works out.

It may well happen that I will face the need to sell property A and/or B. If that happens and in order to maximise the investments during whatever the amount of time we are abroad, what would you recommend?


1.- Setup a Ltd company and keep the "resident" status. If so, would it make sense for the Ltd company to buy any share of any of the houses?
2.- Get the non-resident status so after 5 full financial years i will not be liable for Capital Gains Tax??? If so what kind of Taxes should i pay in the meantime, assuming that my only UK income will come from the renting?
3.- any other suggestion??

Many thanks in advance to whoever replies my query.:)

[Tax Accountant]

The detailed advice you seek is outside the remit of this forum. It is also difficult to advise properly without further information.

However, I would make the following general comments:

(1) If you are non-resident for 5 complete UK tax-years and sell whilst still abroad, there is no UK CGT on either property.

(2) The property which has been your only or main residence at all times is also exempt from UK CGT regardless of how long or short your non-residence. Additionally, you are also allowed final 3 years of ownership to be exempt regardless of whether the property is used as residence or let ot left vacant. Certain other periods could also be exempt depending on reasons for absence and whether you return to the property as your main residence.

Ramnik

[johnj]

A UK company would remain resident and liable to UK tax even if you were non resident and free of capital gains tax. Therefore using a company would not appear to be attractive.
If you have a non UK domicile of origin and do not exceed 17 years in the UK then there are useful planning oppurtunities available to you.
You do not need 5 years out of the UK to be able to dispose of the let property tax free.
If your partner is non UK domiciled be careful if you were to contemplate gifts to her.
Let me know if you want me to elaborate.

[Tax Accountant]

A UK company would remain resident and liable to UK tax even if you were non resident and free of capital gains tax. Therefore using a company would not appear to be attractive.
If you have a non UK domicile of origin and do not exceed 17 years in the UK then there are useful planning oppurtunities available to you.
You do not need 5 years out of the UK to be able to dispose of the let property tax free.
If your partner is non UK domiciled be careful if you were to contemplate gifts to her.
Let me know if you want me to elaborate.

John J,

In the context of this particular query, why do you consider that the querist does not need 5 years out of the UK to be able to dispose of the let property tax free?

Ramnik