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My son bought a bungalow five years ago, spent 3 months doing it up with his girlfriend without either living in the property.Deciding they did not want to live in a bungalow after all, he sold it and bought a house which also needed work. After nine months refurbishment with the same girlfriend neither living there during this time, but planning to on completion, the relationship ended and he went to Australia for a year. HMRC are now seeking CGT claiming as a non-resident, tax is liable on both properties. This seems very harsh. Has anybody else have this happen to them? He has been told that the Revenue are looking into personal records where there have been two or more property sales in a short period of time.
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Don't know, but it seems retrospective. If he has sold the bungalow while living here and only later moved to Aus, I don't see how he would be taxed as a non-res for that period. Is he still there or back now? If he's back I doubt even more that there's anything to pay.
Thank you Goring for replying.
When the relationship ended he sold the house and went to Oz but returned to the UK after one year or so. Has Since bought flat for own use. It does seem strange that HMRC are investigating people who have bought and sold in a two year period. Must be many, likely caught up in this situation.
When the relationship ended he sold the house and went to Oz but returned to the UK after one year or so. Has Since bought flat for own use. It does seem strange that HMRC are investigating people who have bought and sold in a two year period. Must be many, likely caught up in this situation.
This seems very harsh
Umm! I think this looks very generous. I am surprised that HRMC have not viewed these two purchases and sales, as a 'business' and levied income tax rather than CGT
Umm! I think this looks very generous. I am surprised that HRMC have not viewed these two purchases and sales, as a 'business' and levied income tax rather than CGT
Off the top of my head i think the rule is you have to own the property for 6 months for you to be able to claim it was for your own residential purpose
Off the top of my head i think the rule is you have to own the property for 6 months for you to be able to claim it was for your own residential purpose
The way I read it was, that he had not resided in the property at all. If he had just bought and sold, then that would be liable to CGT, less expenses and allowances. If he had occupied both houses and had no other properties HRMC might have viewed it as utilising PPR, but there would have been lots of 'raised eyebrows'. Buying, renovating, not residing, then selling the two properties over a short time frame 'screams business' which would put it into the income tax net.
The way I read it was, that he had not resided in the property at all. If he had just bought and sold, then that would be liable to CGT, less expenses and allowances. If he had occupied both houses and had no other properties HRMC might have viewed it as utilising PPR, but there would have been lots of 'raised eyebrows'. Buying, renovating, not residing, then selling the two properties over a short time frame 'screams business' which would put it into the income tax net.
Where was your son living during all of this?
Hmrc are very tight on this these days becuase of previous house flipping exercises.
I agree with madasahatter that they could have taken a view that your son was running a property business, although he hasn't rented them out from what you say.
Your son does not have a legitamite reason to avoid cgt from the info you have given as he hasn't actually lived in either property and I assume he didn't elect it as his PR.
I don't think you can avoid paying the cgt personally but they may negotiate
Hmrc are very tight on this these days becuase of previous house flipping exercises.
I agree with madasahatter that they could have taken a view that your son was running a property business, although he hasn't rented them out from what you say.
Your son does not have a legitamite reason to avoid cgt from the info you have given as he hasn't actually lived in either property and I assume he didn't elect it as his PR.
I don't think you can avoid paying the cgt personally but they may negotiate
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