PRR - Selling UK primary home, currently Non Resident, Returning to the UK

I am currently UK non tax resident and returning to the UK in/around March 2024. I/We bought a house in the UK in August 2007 and used as our primary residence from August 2007 to June 2015. I/We moved overseas due to an overseas expatriate secondment by my employer and have been overseas since then and as mentioned earlier planning to return to the UK in/around March 2024 with the same employer. From June 2015 until June 2023 the house was rented out. From July 2023 we stopped the letting as we were planning to return to the UK. However, as the house no longer meets our personal needs we intend to sell and reinvest in another residential property in the UK where we will live as our primary residence. The house has been on the market for sale since July 2023 but not yet sold. If it doesn’t sell until we return, we will move in to the same house and live there until it sells. Question: 1. On sale of the residential property (if sold while I am still non-resident) am I eligible for PRR for the period that I was overseas (as deemed residence)? If so would it be for entire period from July 2015 until the date it is sold (including the final period of 9 months)? 2. If not then what periods am I eligible for PRR as deemed residence including the final 9 months? 3. If the house is sold only after we return to the UK and hence become UK tax resident (and irrespective of whether we live in the same house on return or in a temporary company provided accommodation), would the PRR for deemed residence also apply? If so would it be for entire period from July 2015 until the date it is sold (including the final period of 9 months)? Many thanks

Hi Aditya Mukherjee,
HMRC cannot comment on future events as leigslation and/or plans may change.
For current guidance, please refer to HS283 Private Residence Relief (2023)
Thank you.

 

Thanks for your reply. What if the property was sold on 31 October 2023? Could you let me know the following: 1. On sale of the residential property (if sold while I am still non-resident) am I eligible for PRR for the period that I was overseas (as deemed residence)? If so would it be for entire period from July 2015 until the date it is sold (including the final period of 9 months)? 2. If not then what periods am I eligible for PRR as deemed residence including the final 9 months? 3. If the house is sold only after we return to the UK and hence become UK tax resident (and irrespective of whether we live in the same house on return or in a temporary company provided accommodation), would the PRR for deemed residence also apply? If so would it be for entire period from July 2015 until the date it is sold (including the final period of 9 months)?

Hi Aditya Mukherjee,
Have a look at the guidance on private residence relief.  (HS283 Private Residence Relief (2023)).  
The period overseas may be allowable.  Have a look at example 7.
Thank you.

 

I/We bought a house in the UK in August 2007 and used as our primary residence from August 2007 to June 2015. I/We moved overseas due to an overseas expatriate secondment by my employer and have been overseas since then and returned to the UK on 24 May 2024 with the same employer. From June 2015 until June 2023 the house was rented out. From July 2023 we stopped the letting as we were planning to return to the UK. However, as the house no longer meets our personal needs we intend to sell and reinvest in another residential property in the UK where we will live as our primary residence. We agreed on a sale in Feb 2024, exchanged on 10 June and completed on 28 June 2024. Since the sale was almost complete when we returned to the UK on 24 May 2024 could not move back to the property. We did however pay for utilities, local counciol taxes since we were not sure of where we would live when we return and planned to move into teh prroperty had we not exchanged on 10 June. Question: 1. Can we claim PRR for the entire period we were aboard due to employment related reasons? 2. Can we claim PRR even if we unable to move into the property on our return to the UK as we were in the process of exchanging? Many thanks

Hi,
No. Please refer to the examples given at:
HS283 Private Residence Relief (2024)
CG65040 - Private residence relief: periods of absence
Thank you.