Sole property while on missionary work

Dear Ronald,

Capital Gains tax is a shock for many unfortunately, but it sounds like you should qualify for Principle Private Residence relief, which your accountant should have discussed with you.

Please see our article on the subject >> https://www.property118.com/capital-gains-tax-relief-on-a-property-you-have-lived-in/

Snippet from article:

Example of how moving into a BTL property could reduce Capital Gains Tax

If I had owned a property as a buy to let for X years then it could make sense to move into it for a while as my Principal Private Residence “PPR”.

Let’s assume I purchased the property for £100,000 and it’s now worth £200,000, i.e. a £100,000 taxable capital gain if I were to sell the property without ever having lived in it.

Subject to being able to prove it had, at some point, been the Principal Private Residence of my family then we would be entitled to claim PPR relief. This is because PPR relief is available on the sale of a property which has at some time been an only or main residence. 18 months of ownership are exempt in calculating Capital Gains Tax, whether the individual is living there at the time of selling or not.

It is important to note that PPR relief claims are often investigated by HMRC. For this reason it is imperative to be able to prove, beyond any shadow of doubt, that the property was indeed your Principal Private Residence. Examples of how this can be achieved are Council Tax records, bank statements, voters roll, utility bills, doctors and dentists records etc. The more evidence the better of course.

Find an accountant that is used to clients doing missionary working overseas, as I expect you may have no CGI to pay due to the detailed rules on what a Principle Private Residence is. In SOME cases a property can still be your Principle Private Residence even when it is rented out, if you are forced to live elsewhere for your work.

https://www.stewardship.org.uk may be able to point you in the right direction if you phone them, I expect they know of a person that understand your issues.

Whilst working abroad is considered a "qualifying absence" it may be that due to the letting out you will have to account for a proportional element of CGT, but I'm not sure, so as Ian advises get a professional second opinion.

What I would say though is that if you do have to account for the CGT on the period your property was let out, don't forget about Lettings Relief, it will give you some substantial mitigation of any CGT due I would have thought as you can claim up to £40,000 in certain circumstances. Have a read of this article in The Guardian. https://www.theguardian.com/money/2014/aug/21/capital-gains-tax-on-let-property, also this article https://www.which.co.uk/money/tax/capital-gains-tax/guides/capital-gains-tax-on-property which shows a worked example of Letting Relief.

Reply to the comment left by "Neil Patterson" at "13/12/2016 - 09:25":

You are also entitled to 4 years capital gains relief if you worked abroad.