How to avoid CGT on a house sale?

Hi,

I'm currently an ex-pat, with a flat in the UK that has been rented out
for about 5 years (not 100% continuously, but nearly). It is very
unlikely that I'll return to live in that flat long-term, although it
is reasonably likely that I'll come back to the UK in a few years.

What would I have to do in order to avoid CGT liability on the flat, if
I don't sell until after returning? Is there any chance of claiming
exemption as my primary residence, since I have no other UK address? If
it was worth my while for tax purposes, I could probably live there for
a little while after returning, but not for years on end.

The obvious alternative is to sell while I'm away. This should be fully
exempt, I believe (I'm about to pass the 5 year threshold for that).
But I don't really want to do that, both due to the effort involved and
its value as an investment/hedge against house price rises. It's only a
small flat in a cheap area, and the tax bill is unlikely to be very
large.

James

Re: How to avoid CGT on a house sale?

On 16 Jul 2006 18:43:39 -0700, wrote:

>Hi,
>
>I'm currently an ex-pat, with a flat in the UK that has been rented out
>for about 5 years (not 100% continuously, but nearly). It is very
>unlikely that I'll return to live in that flat long-term, although it
>is reasonably likely that I'll come back to the UK in a few years.
>
>What would I have to do in order to avoid CGT liability on the flat, if
>I don't sell until after returning? Is there any chance of claiming
>exemption as my primary residence, since I have no other UK address? If
>it was worth my while for tax purposes, I could probably live there for
>a little while after returning, but not for years on end.
>
>The obvious alternative is to sell while I'm away. This should be fully
>exempt, I believe (I'm about to pass the 5 year threshold for that).
>But I don't really want to do that, both due to the effort involved and
>its value as an investment/hedge against house price rises. It's only a
>small flat in a cheap area, and the tax bill is unlikely to be very
>large.
>
>James

There's various reliefs to take into account:

Annual allowance
Letting relief
Taper relief
Last 3 years
Owner or spouse employed abroad if PPR before and after
Any 3 years if PPR before and after

--
Peter Saxton from London