[UK Neil]

Hi all,

We should hopefully have our visa's about January and are hoping to get our finances in order before we leave for NZ but are worried about taking a big hit from CGT.

We are selling our home and 2 flats, one of which is rented the other which has never been rented.

The rented flat was formerly my home but has been rented for over 3years and the other was inherited about 3years ago but has never been rented.

Are we liable for CGT if we emmigrate? Do we need to be out of the country when we sell? I know there is the 5 year no return rule but we are not planning on coming back to the UK even if it doesnt work out in NZ.

Cheers for any info,
__________________
EOI submitted June 13, 2006
EOI selected June 21, 2006
Decision successful July 13, 2006
ITA received July 20, 2006

[Paul]

The rented flat was formerly my home but has been rented for over 3years and the other was inherited about 3years ago but has never been rented.

You should be able to claim a period of PPR (use as your main home) for when you lived there. It is likely a calculation to time apportion the PPR usage and rented usage would be needed.

Are we liable for CGT if we emmigrate? Do we need to be out of the country when we sell? I know there is the 5 year no return rule but we are not planning on coming back to the UK even if it doesnt work out in NZ.

Possibly not. If you are non resident in the year you sell you may be able to avoid UK CGT providing you don't return within 5 years for any significant time.

However you would probably be liable on your worldwide income in NZ so you may have to pay some tax there even though I believe there is effectively no CGT in NZ?? Someone on the ground may be able to advise further on this

If you want definitive advice you would probably be best seeking an accountant whilst you are still here in UK to get this advice from the UK angle

Don't forget on your inherited flat you would only pay CGT on the increase between probate value and sale value now so there may not be much of a gain anyway once you take into account your tax free CGT band of £8800? So you might be best selling this one before you go, especially if in joint names and you would have 2 lots of CGT free allowances

Good luck!

Paul

[Caroline and Dave]

However you would probably be liable on your worldwide income in NZ so you may have to pay some tax there even though I believe there is effectively no CGT in NZ?? Someone on the ground may be able to advise further on this



Paul
If you check this link you will find you will not have to pay NZ tax on most worldwide income for 49 months www.ird.govt.nz/yoursituation-nonres/move-nz