CGT for Non Residents

[grpaway]

I would most appreciate any help on the below.
My son was non UK resident (Middle East) for 4 years till July 2017.
Previous to this time he worked in UK.
From July 2017 till August 2018 he worked in UK, until he left to worked in China in August 2018 -
During his stay in UK between 2017 and 2018 (Dec 2017 to be precise) he bought a house in UK and lived in it till he left for China.
He is now considering selling this property but understands that he will be liable for CGT.
Is this correct?
Also he informs that there is a 5 year rule that if he is non resident for 5 years (is this tax years?) then he will not be subject to CGT.
Is this correct?
Thanking you.

[Alaric]

Also he informs that there is a 5 year rule that if he is non resident for 5 years (is this tax years?) then he will not be subject to CGT.
Is this correct?

I wouldn't see five years as in any way relevant, Surely the clock only starts when he first purchases the house in December 2017? He would have residence until August 2018 and there's a period after that where the owner occupier exemption continues to apply.

[grpaway]

Alaric,
Thanks for your speedy reply.
I understand (from my son) that you are treated as temporarily non-resident for capital gains tax purposes for up to 5 years.
Not sure if this affects CGT payment if he stays a non resident for 5 years or more.

[Lootman]

I understand (from my son) that you are treated as temporarily non-resident for capital gains tax purposes for up to 5 years.

Not sure if this affects CGT payment if he stays a non resident for 5 years or more.

Yes, I cannot recall when this changed but I do remember it. The previous rule was that if you could claim non-residence for a single tax year, then you could offload all your UK assets in that year and pay no CGT.

Presumably what was happening was that people with a lot of gains were sneaking off to Spain for a year, selling off all UK assets for no tax, and then returning. So to get around that ruse the taxman introduced the 5 year qualification period for non-residents before no CGT applies.

Foreigners pay no UK CGT on UK assets (except UK houses perhaps; not sure about that) and so people who emigrate get to enjoy that same status, just only after 5 years. I would make that 5 full tax years to be safe.

[bluedonkey]

The interaction of CGT, non-residence and main residence is knotty and I would suggest employing a specialist to deal with it. There are a lot of paths to explore, especially in your son's case where there are periods of intermittent residence.

Prior to 6 April 2015 non-residents were generally exempt from CGT on gains made on the disposal of UK assets.

From 6 April 2015, a CGT charge has applied to gains made by non-residents on the disposal of UK residential property (TCGA 1992, s 7AA).

Residence rules are here:
https://www.gov.uk/government/publicati ... e-test-srt