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When can I avoid CGT by emigrating from the UK? |
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Written by Administrator
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The standard rule is that an individual would need to be non UK resident/non UK ordinarily resident for five complete tax years in order to avoid a UK CGT on the disposal of most assets. However, in order to claim the exemption, it is crucial that you dispose of the asset during a tax year that you are wholly non UK resident/non UK ordinarily resident.
On the assumption that you have been previously UK resident before you leave the UK, the split year basis won't not apply for CGT purposes. Therefore if you were to leave the UK in say September 2007, for a permanent absence (or for at least three years) the period from April 2007 - Sept 2007 would traditionally be a period of UK residence with the period Sept 2007 - April 2008 being a period of non UK residence. However, as this split year basis won't apply, for any disposal after April 2007 you would need to be classed as non UK resident for the entire tax year to avoid UK CGT, (as UK CGT is chargeable if you are UK resident or ordinarily resident for part of a tax year).
Again, assuming you were previously UK resident before you left the five year rule would apply and you'd need to be non UK resident for five complete tax years to avoid CGT on assets that you hold at the date of your departure.
Check out these articles when UK CGT can still apply even if you are non UK resident. Emigrating from the UK to avoid CGT
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