Capital Gains Tax

[Calvinmiddle]

We don't yet have a CGT section so will just put this in here for now.

 

I have sold the house we built and moved overseas.  This was not the original plan but things come up and that is what we have done.  Now trying to submit a Non-Residents Capital Gain return which has to be done with 30 days of the sale.  Both solicitor and accountant saying they have never heard of it before which is annoying to say the least.

 

I have managed to find the form I need to complete - https://www.tax.service.gov.uk/shortforms/form/NRCGT_Return

 

Also sure that there is no tax to pay as we lived it in as our main residence.

 

The situation - we build a house in the garden of our existing house, started Aug 2014, took an age to build and we got a completion certificate July 2016.  We moved in on Oct 2016.  All this time the house was still on the same title as the original house as the Land Registry said they would only split on on a sale.  We sold the original house in April 2017, and that is when the new house first got it's own title.

Our situation changed over the summer of 2017 and we decide to move oversea (but to where my wife is from) we sold the new house in April 2018.

 

The forms ask you to enter the 'non-resident net chargeable gain or loss (after exemptions, reliefs or adjustments) arising on this disposal.'  but when you complete the handly calculator on the HRMC website -  https://www.tax.service.gov.uk/calculate-your-capital-gains/non-resident/

you are asked the following questions:

 

• What date did you sign the contract to become the owner? - I'm assuming this is the date the the house got a title from Land Registry

• How did you become the owner? Bought it or Inherited it or Got it as a gift  - not to sure on this one as it was created new out of an existing title

• How much did you pay for the property? or What was the market value of the property? - so if I say I bought it what do I say I paid for it, or if I say I got it as a gift what do I say was the value?

Ultimately is doesn't really matter as far as I can see because even if I say I sold it for 1,000,000 and bought it for 0 as I am claiming Private Residence Relief then the chareable gain is zero.

But what am I meant to enter in the "How much did you pay" field?

 

Any help warmly welcomed

Edited May 3, 2018 by Calvinmiddle
Typo

[newhome]

21 minutes ago, Calvinmiddle said:

 

• What date did you sign the contract to become the owner? - I'm assuming this is the date the the house got a title from Land Registry

• How did you become the owner? Bought it or Inherited it or Got it as a gift  - not to sure on this one as it was created new out of an existing title

• How much did you pay for the property? or What was the market value of the property? - so if I say I bought it what do I say I paid for it, or if I say I got it as a gift what do I say was the value?

 

I’m certainly not an expert so this is just how I might answer the questions. 

 

1. Yes I would put the date that the house got its own title. 

2. Put that you purchased the property assuming that you purchased the original property and weren’t gifted it. You also presumably bought all of the materials to build the new property. 

3. This one is more tricky but I would put the market value of the house at the time of the split title and I imagine you will have to take a guess at that. 

 

Clearly a tax expert will know more about these forms than me but as with all these things the most important thing from HMRC’s perspective initially will be to receive the form within 30 days so I would ensure that you submit the form ASAP and send it via a recorded delivery service. Then HMRC will likely take months to do anything with it. As no tax is due it doesn’t seem worth engaging a tax expert. Your circumstances are also pretty unique. 

 

 

 

[Ferdinand]

3 A retrospective valuation on the plot should be possible, since there will be full records of transactions in the area. Should take no longer than usual. 

 

If you find an accountant dealing with expat landlords they will know about cgt etc. You can find one via LL sites etc.

 

I think I would try the HMRC helpline by phone. Obvs Skype or whatever.

 

Ferdinand

Edited May 3, 2018 by Ferdinand

[newhome]

4 hours ago, Ferdinand said:

 

I think I would try the HMRC helpline by phone. Obvs Skype or whatever.

 

I tried the helpline before I submitted my VAT reclaim. Never has waiting in a queue for ages been such a waste of time. The guy barely knew what the reclaim scheme was let alone answer questions about it. Maybe I was just unlucky. 

 

Edited May 3, 2018 by newhome

[Triassic]

Having made a genuine  mistake on a CGT form a few years ago and got fined, all I can suggest is get advice. I’d also add a narrative ive to any text boxes on the form explains that this was a self Build that was not bought, inherited or gifted.

 

There are a series of videos on YouTube put there by HMRC, might be worth watching.

Edited May 3, 2018 by Triassic

[Temp]

I would explain the info you put on the form in a covering letter. 

 

Remember that your calculation may also be shared with the tax authorities in your new country of residence and they may not have an exemption for PPR. 

 

[AliG]

Are you sure you should be submitting the non-resident's capital gain form as you were a resident at the time of the sale?

 

I don't know anything about it but I thought this was worth checking.

[newhome]

1 minute ago, AliG said:

Are you sure you should be submitting the non-resident's capital gain form as you were a resident at the time of the sale?

 

I think the house sold after he had moved abroad? 

[AliG]

Sorry, I missed that. Shouldn't respond to things whilst at work.

Edited May 3, 2018 by AliG

[newhome]

I had a look on the web and the overwhelming complaint from tax advisors about this form seems to be that HMRC are fining anyone who submitted the form even a day late even if no tax was due. Thus getting it back on time with a covering letter as suggested above would appear to be important leaving an appropriate lead time for it to travel from overseas. As you rightly say there should be no CGT to pay anyway. Assume if the property was jointly owned you are both completing a form? 

 

[Calvinmiddle]

House was on the market before we left but it didn’t get a seller and complete until after we had moved, and this was in this tax year which is the first full year we are classed as non-residents.

[Triassic]

Does this help

 

https://www.expatinfodesk.com/expat-guide/nationality-specific-information/british/selling-property/

[Calvinmiddle]

Think that's old and out of date.  

But me being overseas isn’t the issue.

The issue is what does a self builder say they paid for a property if they carved out part of their garden and built in it?

Is it zero?

[newhome]

No, don’t put zero. Even if you are CGT exempt in the UK it might help you where you are living if there was little profit shown on paper. Might not matter but tax regimes have a habit of moving the goalposts. 

 

So, either use what you think the market value of the property was at the time it was completed, or use your total build figure plus an estimate of the plot value at the time of completion. You paid for all of that so it’s clearly not zero. Just write a letter to state what you’ve done.  

 

And presumably you have the HMRC paperwork for the vat claim to evidence some of that? 

Edited May 3, 2018 by newhome

[Triassic]

I as also thinks by total build cost plus value of the plot.

 

to be honest im not even sure CHT is applicable, as this is as your last home before you left.