| CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383018] |
Sa, 22 April 2006 23:46 |
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My landlord is a UK pensioner who has decided to relocate to Cyprus. He
will be moving to Cyprus in the next few weeks and has completed the
forms necessary to relocate.
We currently rent his Flat and we want to buy it. However he is
concerned about the CGT implications and thinks waiting for 1 year (as
a Cypriote resident) may be beneficial.
He also has his main Home on sale in the UK which he should sell in the
next few weeks. When he sells his main Home he assumes he will not have
to pay CGT because it is is main home.
Should he sell us the flat when he moves to Cyprus (to avoid paying
CGT) or will he need to wait until he has settled in Cyprus for a year,
before he can sell us the flat?
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383055 ] |
So, 23 April 2006 17:43 |
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In message <1145742368.501349.45630 [at] t31g2000cwb.googlegroups.com>,
foz.jan [at] gmail.com writes
>My landlord is a UK pensioner who has decided to relocate to Cyprus. He
>will be moving to Cyprus in the next few weeks and has completed the
>forms necessary to relocate.
>
>We currently rent his Flat and we want to buy it. However he is
>concerned about the CGT implications and thinks waiting for 1 year (as
>a Cypriote resident) may be beneficial.
>
>He also has his main Home on sale in the UK which he should sell in the
>next few weeks. When he sells his main Home he assumes he will not have
>to pay CGT because it is is main home.
>
>Should he sell us the flat when he moves to Cyprus (to avoid paying
>CGT) or will he need to wait until he has settled in Cyprus for a year,
>before he can sell us the flat?
>
To be sure of avoiding CGT he needs to state his intention to become
non-resident, and remain so for at least 5 years, before being sure that
CGT will not be due. This always assumes that the law does not change in
the meantime.
--
Richard Faulkner
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383105 ] |
Mo, 24 April 2006 04:23 |
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"Richard Faulkner" <richard [at] estate.demon.co.uk> wrote in message
-SNIPPED-
>
> To be sure of avoiding CGT he needs to state his intention to become
> non-resident, and remain so for at least 5 years, before being sure that
> CGT will not be due. This always assumes that the law does not change in
> the meantime.
>
Do you have to state intention to become non-resident or just be
non-resident for 5 years to be CGT free?
Mark BR
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383107 ] |
Mo, 24 April 2006 07:49 |
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Mark BR wrote:
> "Richard Faulkner" <richard [at] estate.demon.co.uk> wrote in message
>
> -SNIPPED-
>
> >
> > To be sure of avoiding CGT he needs to state his intention to become
> > non-resident, and remain so for at least 5 years, before being sure that
> > CGT will not be due. This always assumes that the law does not change in
> > the meantime.
> >
>
> Do you have to state intention to become non-resident or just be
> non-resident for 5 years to be CGT free?
>
> Mark BR
In practical terms, you need to state it formally, and I believe he has
until July 6th to make the declaration for 2006/2007.
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383118 ] |
Mo, 24 April 2006 12:11 |
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In message <444c36c9$0$16470$892e7fe2 [at] authen.yellow.readfreenews.net>,
Mark BR <briley [at] x-privat.it> writes
>
>"Richard Faulkner" <richard [at] estate.demon.co.uk> wrote in message
>
>-SNIPPED-
>
>>
>> To be sure of avoiding CGT he needs to state his intention to become
>> non-resident, and remain so for at least 5 years, before being sure that
>> CGT will not be due. This always assumes that the law does not change in
>> the meantime.
>>
>
>Do you have to state intention to become non-resident or just be
>non-resident for 5 years to be CGT free?
>
>Mark BR
>
>
Everything I have read suggests that you complete Inland Revenue Form
P85 "Leaving the United Kingdom".
Not sure if you have to, but it seems sensible to make things clear,
particularly as passports dont get stamped in Europe.
Regds
--
Richard Faulkner
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383125 ] |
Mo, 24 April 2006 13:08 |
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Richard Faulkner wrote:
> Everything I have read suggests that you complete Inland Revenue Form
> P85 "Leaving the United Kingdom".
>
> Not sure if you have to, but it seems sensible to make things clear,
> particularly as passports dont get stamped in Europe.
Stamping of passports is irrelevant. If they did get stamped, it
would only prove where you physically were on certain dates. That
is not enough to prove non-residency.
However, if you could prove residency somewhere specific (and surely
in most of Europe you are required to register residency unless you're
merely visiting), that should suffice as evidence of non-residency
everywhere else.
Not sure what you'd do when you're residing on a boat, since you'd
technically not be resident anywhere. Worse: if you live on a UK
registered vessel, that might make you a deemed UK resident! I dare
say you'll have looked into this, in case you need to cash in part
of Faulkner Towers.
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383128 ] |
Mo, 24 April 2006 13:45 |
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My landlord has already registered his intentions to leave the UK, by
completing P85 (2006/2007).
However, should he wait to sell the flat to us until April 2007 (to
avoid paying CGT in 2006/2007) or is he exempt as soon as he moves to
Cyprus (ie in August 2006 he will have moved and will be renting a
house in Cyprus?).
Essentially, should he sell the flat immediately, or in August 2006, or
in April 2007?
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383132 ] |
Mo, 24 April 2006 14:41 |
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In message <Vk23g.58615$wl.49430 [at] text.news.blueyonder.co.uk>, Ronald
Raygun <no.spam [at] localhost.localdomain> writes
>Richard Faulkner wrote:
>
>> Everything I have read suggests that you complete Inland Revenue Form
>> P85 "Leaving the United Kingdom".
>>
>> Not sure if you have to, but it seems sensible to make things clear,
>> particularly as passports dont get stamped in Europe.
>
>Stamping of passports is irrelevant. If they did get stamped, it
>would only prove where you physically were on certain dates. That
>is not enough to prove non-residency.
>
>However, if you could prove residency somewhere specific (and surely
>in most of Europe you are required to register residency unless you're
>merely visiting), that should suffice as evidence of non-residency
>everywhere else.
>
>Not sure what you'd do when you're residing on a boat, since you'd
>technically not be resident anywhere. Worse: if you live on a UK
>registered vessel, that might make you a deemed UK resident! I dare
>say you'll have looked into this, in case you need to cash in part
>of Faulkner Towers.
>
<G>
You may recall my wanting to change a house converted into 7 flats on 1
freehold, into 7 separate leaseholds. Doing this would have created 7
disposals for CGT purposes, and an immediate liability for CGT. Needless
to say, I didnt do it.
Having taken some legal and tax advice, and having read every government
document I can find on the subject, it seems I can become non resident
by living on a boat, (being careful not to stay anywhere for long enough
to become a resident), and will not be subject to CGT on UK disposals
after 5 full tax years.
The consensus is that any less than 5 years may leave any disposals
subject to the tax.
I may not need to cash in, but I will definitely be creating the
separate leases, if only to realise the gain without actually selling.
--
Richard Faulkner
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| Re: CGT (Capital Gains Tax) on Investment flat (pensioner moving abroad) [message #383288 ] |
Di, 25 April 2006 15:03 |
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If the landlord has declared his intentions to become non-UK resident
(ie P85) and moves to Cyprus in August 2006, will he be exempt from
CGT, when he sells his flat to us in June 2006? If he has to pay CGT,
he will wait until next year, before he puts his property on the market
(by the way he has no intention to return to the UK in the next 5
years+).
We would like him to sell now, but he wants to avoid CGT on this
investment property.
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