Is a flat I rented out liable for capital gains tax?

Is a flat I rented out liable for capital gains tax?

Q I bought my home in London in July 2002 and lived it in as my main residence until September 2008. I couldn't sell my flat so rented the property out for a year from September 2008 to September 2009.

I left the UK in September 2008 to move back to Australia after living in the UK from January 2001 (I am a UK citizen also) and informed the tax office that I was leaving the UK permanently. As I have a property in the UK, and received rental income, I completed a non-resident tax return for the year April 2008 to April 2009. I therefore had to pay tax on the rental income for this year.

I returned to the UK in June 2009 and moved back into my flat. My tenants moved out in September 2009. I am now living and working in London.

I would like to sell my flat early next year. Am I liable to pay any capital gains tax, since I had rented it out and was abroad in Australia during this time. SN

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Q You don't escape UK capital gains tax until you have lived outside the UK for I want to sell a flat I have rented outsell your flat. However, the flipside of still being covered by UK capital gains tax rules is that you should still benefit from "private residence relief" which makes gains on a home you lived in tax free. You must, as you did, have lived in the home and sell it within three years of leaving, to be sure of qualifying for the relief. More information is available at www.hmrc.gov.uk where you will find both Helpsheet 283 Private Residence Relief and Helpsheet 278 Temporary non-residents and capital gains tax.

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