BB-54

Hi, When using the HMRC CGT calculator, it expects you to provide the actual value of PRR. So I'm trying to understand how to calculate this. Please can you check the example below and let me know if I am doing this correctly? A non-resident selling UK residential property owned since 2010 only has to pay CGT on the capital gain since 6 April 2015. They lived in the property for 5 years (60 months) before April 2015 In the period since April 2015 they qualify for 4 years (48 months) Private Residence Relief. If they sell the property on 5 April 2024 that would be 168 months since they bought the property and 108 months since 6 April 2015 To calculate the value of the PRR you have to multiply the Gain x (period of occupation / total period of ownership) So for a for a non-resident who is only liable for CGT on the gain since April 2015 can they apply the above calculation only for the period since 2015: Gain (since 6 April 2015) X 48 months occupation (since 6 April 2025) / 108 months ownership (since 6 April 2016) Or do they have to work out the Private Residence portion across the whole ownership period ie Gain (since 6 April 2015) X (93 months total occupation / 168 months total ownership) And would there be any difference if you use the straight-line apportionment method vs the rebasing method? Thanks

Hi, Could you please clarify what is mean by 'ceasing to have a UK home' for Split year Case 3. If a person owns a home in the UK and leaves that home to live overseas in another home that they own, does that mean they cease to have a home in the UK - because they are no longer living there. Or do they have to actually sell or rent out the UK home in order to be regarded as 'ceasing to have a home in the UK'? Thanks.

Hi Clive, Thank you so much for your detailed explanation, it has really helped my understanding. I still have a problem with the following sentence because I think it's very misleading: he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests); This is what made me believe that for the purposes of Income Tax, Corporation Tax and Capital Gains Tax (the types of tax that the treaty covers), he would be deemed to be non-resident in the UK and therefore would not be taxable on his worldwide gains. I realise now that this is my misinterpretation, but I do feel that it must be a fairly common mistake (not many of us are fluent in 'legalese'). It would be helpful if the DTA spelled it out more clearly, as you have done. So, thank you for that.

Hi I read your response with interest because I would tend to agree with Frenchie that the DTA overrides the SRT in his case. But I am not a tax accountant or in any way an 'expert' in this area so I am keen to understand where I am going wrong. I agree that SRT is first used to determine tax residency according to UK law. This is because the DTA is only relevant if you are considered resident in both countries. If Frenchie is regarded as tax resident in UK under the UK SRT and also tax resident in France using their SRT rules, then he is Tax Resident in both countries. Then you go to the DTA to work out how you will be taxed. The DTA has a bunch of rules that (to my mind) are designed to allocate you to be a tax resident of a single country. The rule that Frenchie uses states "if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests)" After this, you get the allocation rules, all of which seem to talk about a 'resident of one state' and whether they can be taxed in 'the other state'. Which therefore wouldn't make sense if Frenchie was actually resident in both states. So by my reading the DTA deems him to be resident of just France - and therefore non-resident in UK. Which overrides the SRT. I'd really like to understand what I am missing. Thanks.

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