A reader who has lived in Hong Kong since 1990 wonders if he’ll have to pay capital gains tax after selling a home in Britain
Q: I have an issue regarding capital gains tax on a UK property. In 1990, following my divorce from my first wife in the UK, I relocated to Hong Kong to start up the Far East operations of the UK company I worked for. When the marital home in the UK was eventually sold, my son, who was at university at the time, had nowhere to live, so I bought him a home in Hertfordshire in 1992.
He vacated the house in 2011 to get married and I have been renting out the property, but eventually sold it in October 2014. I have decided that Hong Kong will remain my permanent place of residence.
My question is: must I complete the capital gains summary on my annual UK tax return? I did read somewhere that capital gains made on UK property will only apply after April 2015, so I would be intrigued to know if the concerns I have overmaking a tax payment may not apply in my case.
A. Adam Thompson, tax manager, The Fry Group (thefrygroup.co.uk)
Assuming that you have been non-resident in the UK for tax purposes since 1990 when you moved to Hong Kong, then there are no tax implications arising from the sale of your property.
You are quite right that new legislation came into effect from April 6 2015, but as the sale occurred before that date, and you have been non-UK resident for over five years, they have no impact on your situation.
You will not be required to report this disposal on your tax return for the 2014/15 tax year.
The above advice is generalised and it is important that you obtain advice specific to your own circumstances.
The other members of our expert panel are:
Howard Bilton, chairman, The Sovereign Group (www.sovereigngroup.com)
Justin Harris, managing director of Chase Belgrave (chasebelgrave.com)
Richard Musty, international director, Lloyds Bank (international.lloydsbank.com)
Jason Porter, director, Blevins Franks
Daniel Abrahams, CEO, CurrencyTransfer, an independent foreign exchange marketplace (currencytransfer.com)
Lindsay Kinnealy, legal director, international property department, Slater & Gordon (slatergordon.co.uk)
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