cg64585 - Private Residence Relief: deemed not a residence: residences in another territory: interaction with absence reliefs

Non-UK resident for year in which the disposal is made

Up to 5 April 2015 if an individual was non-UK resident, a charge to CGT would only apply on the disposal of an interest in a residential property if it was:

  • used in the trade of a branch or agency located in the UK, see CG25500+, or
  • disposed of during a period of temporary non-residence, see CG26100+.

For disposals in the period 6 April 2015 to 5 April 2019 unless an election is made under TCGA92/Sch 4ZZB para 2, or for disposals after 5 April 2019 unless an election is made under TCGA92/Sch 4AA para 8 or 9 only the period of ownership that is after 5 April 2015 is taken into account because only the gain accruing after 5 April 2015 is within the scope of NRCGT.

In cases where a period of absence includes 6 April 2015 and the period of ownership is treated as commencing on 6 April 2015, s223A(2) TCGA92 allows an individual to elect that an earlier period should be taken into account for the purposes of determining entitlement to relief under s223 TCGA92, see CG65030+.

Where an election is made it must state the date on which the individual is relying on to meet condition A (see CG65046). The period between the date on which condition A is met and 5 April 2015 is then taken into account when determining the absence relief that may be due.

Example 1

Mr F has a residence in the UK and he is a UK resident up to 2012/13. He then becomes non-resident from 6 April 2013. He elects that 6 April 2013 should be treated as the date on which condition A is met.

Where the conditions for absence reliefs are met the property is deemed to be occupied as a residence s223(3) TCGA92.

Example 2

Mr F has a residence in the UK and he is a UK resident up to 2012/13. He then becomes non-resident from 6 April 2013. Mr F returns to the UK and becomes resident again for 2018/19. He lives in his former residence for one year, leaves the UK again on 5 April 2019 and eventually disposes of the UK property on 5 April 2021.

In the period 6 April 13 to 5 April 2019 he had no other residence on which private residence relief was due.

Mr F makes an election under s223A(2) TCGA92 so that condition A of s223 is met on 5 April 2013. No election is made under para 8 or 9 Sch 4AA.

The period from 6 April 2015 could be analysed as follows:

  • 6 April 2015 to 5 April 2016 (period of absence for any reason that does not exceed three years in total, s223(3)(a) TCGA92, CG65030) – private residence relief due
  • 6 April 2016 to 5 April 2018 – No relief due
  • 6 April 2018 to 5 April 2019 (actual use as only residence) – private residence relief due
  • 6 April 2019 to 5 July 2020 – No relief due
  • 6 July 2020 to 5 April 2021 (final period exemption, see CG64985) - private residence relief due

Gain for period from 6 April 2015 is £300,000.

Private residence relief due (2.75/6) is £137,500

Non-Resident Capital Gain is £162,500

Further examples are included in CG65070.