Hi, I bought my house in the UK in 1980, was working and lived in it as my only home.
5 years ago I retired, rented out my house and came to Thailand.
I now wish to return to the UK, live in my house for about 6 months while I sort out a few things as well as selling my house.
So I lived in my house as my only home for 37 years, then rented it out for 5 years.
Does anyone know what the rules are for me paying Capital Gains Tax?
Thanks in advance 
Keith

You may have to pay something. This page may help you:-

Tax when you sell your home: If you let out your home - GOV.UK (www.gov.uk)

 

I will be selling my house there next year when the tenants leave, and I know I will be liable for CGT on the increase in value since April 2015, when the rules were changed. I had it valued then as a precaution.

 

Sold mine last year, my only property in the UK, no Capital Gains tax.

2 minutes ago, roo860 said:

Sold mine last year, my only property in the UK, no Capital Gains tax.

Did you declare the income to the taxman ?

I am also not an expert, but this is my understanding, unless things have changed recently.

The initial valuation will be taken from 31 March 1982. (This date is the same for everyone who has owned an asset longer than that, as CGT was rebased.) You will need to get a valuation of what it was worth then. 

Let's say it was worth £100,000 and it's worth £220,000 now. The gain is £120,000. Let's also say you have receipts/proof to show you did improvements to the property, and for the costs of buying & selling it, and these total £20,000. Now the gain is £100,000.

The CGT will be calculated monthly. March 1982 until now is ~ 495 months. The gain is ~£202/m

You rented it out for 5 years/60 months and lived in it for 435 months. However, because it was once your main home, the last 9 months are exempt whether you live in it or not (the 'final period'), so it is chargeable for 51 months (60m-9m) and you get private residence relief for the other 444 months. 

So with a total gain of £100k, you would get PRR on ~£89,698 (444 months), and you would be liable for CGT on ~£10,303 (51 months). You get a £6k annual exemption, assuming you haven't sold any other assets that year. £10,303 - £6k = £4,303 gain. 

Assuming you are a basic rate tax payer, you would be liable for CGT at 18% of £4,303 = £775 to pay.

Aside from the random 'valuations' I've used, there are a lot of assumptions here. If you are officially non-resident, the calculation is completely different, as is the valuation date. There are calculators on the HMRC site that will help you.

Wow thanks for the very good fast replies.

@Eff1n2ret thanks for the info and the link.

@Polar Bear thanks a lot for the very good detailed explanation.

I am now happy as I was hoping that I would only pay a proportion of tax for the years I have had my house rented out as that seemed to be fair.

So thanks to you both I realise that is the case.

Thanks again

Keith

1 hour ago, Mac Mickmanus said:

Did you declare the income to the taxman ?

No, why should I?

Just now, roo860 said:

No, why should I?

U.K law says you should .

Do you intend to not go back to the U.K ?

2 minutes ago, Mac Mickmanus said:

U.K law says you should .

Do you intend to not go back to the U.K ?

You're only liable to pay CGT on any property that isn't your primary place of residence - i.e. your main home where you have lived for at least 2 years. 

 

https://www.

2 minutes ago, roo860 said:

You're only liable to pay CGT on any property that isn't your primary place of residence - i.e. your main home where you have lived for at least 2 years. 

 

https://www.

Did you rent it out when you weren't living in it? 

3 minutes ago, roo860 said:

You're only liable to pay CGT on any property that isn't your primary place of residence - i.e. your main home where you have lived for at least 2 years. 

 

https://www.

Thanks, that's handy to know .

I was going to sell my property and flee to Thailand without telling or paying the taxman .

   I dont have to do that now

13 hours ago, Mac Mickmanus said:

Thanks, that's handy to know .

I was going to sell my property and flee to Thailand without telling or paying the taxman .

   I dont have to do that now

Oh yes you do!

 

https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-property-in-the-uk-on-or-after-6-april-2020

16 hours ago, Mac Mickmanus said:

Did you declare the income to the taxman ?

I sold mine 2021, it had been rented out to the same guy for 16 years, then he bought it. I had to do self-assessment for cap gains, paid around GBP2,300, it was my only property in UK.

14 hours ago, Mac Mickmanus said:

I dont have to do that now

In addition to @bradistonlink this link gives concrete examples of the different ways to work out what you may owe if you are officially non-resident for tax in the UK

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss

 

Interesting to me as the more complex calculation over a longer period gave a reduced CGT charge.

16 minutes ago, Older and Wiser said:

I sold mine 2021, it had been rented out to the same guy for 16 years, then he bought it. I had to do self-assessment for cap gains, paid around GBP2,300, it was my only property in UK.

Do you mind me asking if you only paid £2300 capital gains, how much your property increased in value in those 16 years. In my case I have had my rental property for 25 years and in that time it has increased in value more than 400%.

May I suggest talking to an accountant (their fee should also be tax deductible). There are certain things that depreciate in value also. 

I just started looking into this as I have a few properties in the UK and my finances are complicated to say the least. My basic understanding thus far is no CGT up to 2015. CGT on increase in value after 2015 to the point of sale (can't remember if this applies to all properties or only to those properties that are not your home). You have to pay taxman within a certain period of time after selling your home. I think it is 90d. I imagine the taxman will be aware that you have sold your home given that Land Registry/Local Council will need to know as well as potential reporting requirements from 3rd party agencies. It probably will not cross their radar initially but it may do in the future. I have just been contacted by the taxman suggesting I owe him tax (I don't). I can only assume he got his information from an enquiry I made of my local council about 3 years ago. This is possibly linked to a phone call my sister received a few years ago asking if I lived at her address (I don't but I use it as a correspondence address). The UK system may be slow but there are no guarantees that they will not find out at some point. If you have cut all ties with the UK then this probably will not matter.

1 hour ago, topt said:

In addition to @bradistonlink this link gives concrete examples of the different ways to work out what you may owe if you are officially non-resident for tax in the UK

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-calculating-taxable-gain-or-loss

 

Interesting to me as the more complex calculation over a longer period gave a reduced CGT charge.

I sold a property 2 years ago and used the CGT calculation for non residents based on an April 2015 valuation, which I happened to have. If I recall, the amount owed in CGT was significantly lower, in fact, 0, using this method, mainly because the value as sold was less than the 2015 valuation, whereas it was about 50% higher using the other method. Down to the difference between inflated agent's valuations, and real market value as sold 6 years later.

3 minutes ago, bradiston said:

I sold a property 2 years ago and used the CGT calculation for non residents based on an April 2015 valuation, which I happened to have. If I recall, the amount owed in CGT was significantly lower, in fact, 0, using this method, mainly because the value as sold was less than the 2015 valuation, whereas it was about 50% higher using the other method. Down to the difference between inflated agent's valuations, and real market value as sold 6 years later.

Crikey that does surprise me that there was that much difference. I also had a valuation done in 2015 and more recently (end 2021) when I was back out of interest and there was a quite large theoretical increase......

Currently no plans to sell so we'll see in the fullness of time but unfortunately I can only see governments making it more punitive in the future.

28 minutes ago, topt said:

Crikey that does surprise me that there was that much difference. I also had a valuation done in 2015 and more recently (end 2021) when I was back out of interest and there was a quite large theoretical increase......

Currently no plans to sell so we'll see in the fullness of time but unfortunately I can only see governments making it more punitive in the future.

I think the difference in 2015 valuation and 2021 sale price was about £20,000. I was selling to my daughter, so, keeping it in the family, took the lowest valuation I could get! It was still a fair market price though. Anyway, I did the CGT declaration as required and have not heard anything back.

 

Don't do it, will be the biggest mistake of your life, especially to live amongst the free loaders.